Bits Bucket For December 31, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Didn’t see it mentioned yet, but the Huffington Post is starting a “Move Your Money” campaign, encouraging people to move their money out of “too big to fail” institutions and into community banks.
http://www.huffingtonpost.com/arianna-huffington/move-your-money-a-new-yea_b_406022.html
It’s been 20 or more years since we had an account at a TBTF bank. We prefer smaller banks; they’re a lot easier to deal with.
And smaller, local banks have much more exposure to CRE notes.
Rancher,
Well spoken. ‘Actually’ the “Material Deficiency Report” the FDIC and Oregon Department of Finance & Corporate Securities prepared on our LOCAL failed bank said it was their exposure to ADC loans ( Aquisition, Development & Construction ) ( but what’s in an acronym? )
Again, in spite of insistances to the contrary ( there WERE no “safe havens” ) O.k, NOW… I’m ready to start the New Millennium! ( The first decade is just like a “warm up” right? )
Given the Fed’s ZIRP loans to the TBTF Megabanks, I don’t see why it matters to them one lick whether anyone else parks money in their coffers, anyway…
TBTF= too big to need customers, a viable business model, or any degree of efficiency. Kind of like our government.
Hah, community banks.
Twenty years ago we had the Saving and Loan debacle. IMO this was brought about by the Fed Gov loosing up on oversight. Within one year it all ended in tears. The biggest sinners/crooks were the smallest local S&Ls.
Now we have small (and large) community banks failing all over the place. In GA every county with a well connected Good Ole Boy opened up a bank or two. Most of their loans were to CRE and housing developers in Fla.
Unfortunetly I will stay with a TBTF joint.
I want my public option bank!
Just some little mechanism that I can use as an electronic mattress, for direct deposit going in, and ATM cash and bill-paying coming out. Automatically guaranteed by FDIC, without the middleman. Oh, and the only other “product” the Public Option bank would offer is a savings account backed by laddered treasuries.
Oooh, I like the public option bank idea!
Seriously though, why not? As it stands, the banks are making all the money while the taxpayers (FDIC) are taking all the risks. Not sure why we need the middlemen who simply skim profits off of every transaction and use their customers money to gamble with.
That’s called “narrow banking” or 100% reserve banking, and was the topic of a FT article last week; actually it was originally printed on Sep. 29th and reprinted in their “year in review” section.
It’s an excellent idea. I have one slight alteration, though, as would all orthodox Austrians: make the reserve gold instead of government securities.
I too would like to move to a small bank, but the online software with small banks is so clunky compared to USAA or Wells.
U.S. in fiscal peril with $12.1 trillion debt ~ USA TODAY
When the debt limit must be raised again in February, a dozen senators led by Sen. Kent Conrad, Sen. Judd Gregg, plan to block action unless they get a vote on their commission.
WASHINGTON — After $787 billion in stimulus spending and $700 billion in bank bailouts, 2010 is fast shaping up to be the year of the federal budget diet.
Bipartisan support is growing in Congress for action to stabilize the nation’s bulging debt, which is now $12.1 trillion. Influential experts from former Federal Reserve Board chairman Alan Greenspan to former comptroller general David Walker have joined the cause.
The public debt is the amount owed to individual investors, including foreign countries, but excluding money the government owes to its own trust funds. It has soared from $5.8 trillion to $7.6 trillion this year alone — and is more than half the size of the nation’s economy for the first time since 1956.
Without action to reduce that unprecedented rise in red ink, lawmakers and experts say, Washington risks a fiscal crisis. The Congressional Budget Office projects annual interest on the public debt would be about $800 billion by 2019, but the Heritage Foundation’s Brian Riedl and other analysts estimate it could surpass $1 trillion by then. Foreign creditors could refuse to buy more Treasury securities.
I am sure that the health care reform and the federal gurantees of Freddie & Fanny will help bring the budget deficit under control. Throw in retiring boomers and a couple of wars in far flung countries and all will be just fine.
Don’t forget the FDIC guarantee (just raised to $500 Billion), the FHA guarantee (??), and cap & trade.
Does anyone know what the FHA guarantee is - or if there is currently a cap on it? I couldn’t find one.
Grow or die.
“Foreign creditors could refuse to buy more Treasury securities”
What seemed like a such radical concept not so long ago seems much more plausible today. When it does happen, barring a miracle hail mary pass, the currency destruction will be swift IMHO. YMMV.
This looks very familiar. It reminds me of yesteryear’s FBs, particularly my BIL. He was spending the equity ‘fictitious principal’ from his primary residence to pay the interest and maintenance on two investment properties. For a while, he boasted how well he was doing until the bank pulled his line of credit. Now, he is ditching everything for less than he owes.
A rude awakening awaits the creditors of the United Corporations of America (UCA). We don’t have the structures in place to pay back this money. We lack the tax base. Most of the investments we are currently making are on things that have already failed. That’s not going to stop politicians from boasting how well UCA is doing, however.
As part of debt reduction measures, I am sure that Sen Kent Conrad (D-No Dak) will agree to large cuts in farm subsidies.
“The public debt is the amount owed to individual investors, including foreign countries, but excluding money the government owes to its own trust funds”
And by any chance can anyone tell us how much the government owes it’s own trust funds???
The amount of obfuscation in their accounting system is truly amazing and I cannot understand why anyone would want to trust them (all governments) with anything.
Nobody wants to trust them, and not many do trust them, but there is essentially nothing you can do about it whether you do or don’t. All you can hope for is an invasion and regime change, and even that’s usually an ‘out of the frying pan’ development.
The mad Beast rules, and that’s just that.
Mo’ Money…
U.S. takes majority stake in GMAC, giving lender $3.8 billion more in aid
Washington Post ~ December 31, 2009
The federal government said Wednesday that it will take majority control of troubled auto lender GMAC and provide an additional $3.8 billion in aid to the company, which has been unable to raise from private investors the money it needs to staunch its losses.
The Treasury Department has said for months that GMAC would need more federal money, but the decision to increase the government’s ownership stake came as a surprise, cutting against the grain of the Obama administration’s recent efforts to wind down its bailout of large banks.
What initially appeared to be a closing act now looks more like year-end portfolio rebalancing, with companies including Citigroup and Bank of America allowed to repay aid even as the government deepens its involvement in mortgage financiers Fannie Mae and Freddie Mac — and now, GMAC.
The government now owns majority ownership stakes in those three firms, General Motors and insurance giant American International Group. It also holds large stakes in Citigroup and Chrysler.
So when can we go and pick up OUR new FREE Tahoes? Since I am now, as a taxpayer, the “majority” shareholder I vote to give ourselves a big, fat, free corvette…
What is the difference between what I just described and the bonuses that GS big wigs are getting? (Other than a vette is a pittance compared to what the CEOs are getting)
Mortgage Bond Rally May End, Rates Rise as Fed Stops Purchases.
Dec. 31 (Bloomberg) — Mortgage bonds are poised to slump after a record rally as the Federal Reserve’s unprecedented buying of $1.25 trillion of the securities ends as soon as March, driving up interest rates on new home loans.
Analysts at BNP Paribas SA, Credit Suisse Group AG and JPMorgan Chase & Co. say the extra yield over benchmark rates that investors demand to hold the securities will widen as much as half a percentage point as the Fed stops purchasing. The 11- month-old program has reduced yields, which guide lending rates, by about 1 percentage point, BNP estimates.
The Fed has been buying at “way” narrower spreads than “where the private sector would be willing to” invest, said Doug Dachille, chief executive officer of New York-based First Principles Capital Management LLC, which oversees about $8 billion of fixed-income investments.
Rising yields mean loan rates are likely to end 2010 almost 0.75 percentage point higher than they are currently, based on forecasts for government bonds and spreads, adding to challenges for a housing market struggling to recover from its worst slump since the 1930s. Fed Chairman Ben S. Bernanke’s goal this year has been to lower the costs for consumers to borrow and help bolster the economy as banks curbed lending.
No worries. The GSEs will step in where the Fed left off!
——————–
Let’s hope 2010 is the beginning of a fresh new decade that will turn the tables on the 2000-2009 decade. No more bubbles, less debt, higher interest rates, better JOBS, and an end to flipping (and other financial speculation) as a way of “making a living.”
It’s not looking good so far, but this last decade really threw responsible people under a bus. It’s time for a **real** change!
CA renter,
Like the way you think! The first decade of any NM is just a “mulligan” any way. Yeah, we’ve let the kids have their “no rules, no grades” approach long enough.
Time for the adults to take over.
What’s an “NM”?
Any relation to an enema?
The New Millenium!! right, DinOR?
The first decade of any NM is just a “mulligan” any way.
Bite your tongue! During the last “mulligan,” the pres was my Teddy. Can we have a mulligan on that mulligan?
“… driving up interest rates on new home loans.”
Buy now or be priced out forever.
I wouldn’t at all be surprised to see a surge of home sales because of these percieved interest rate hikes.
Yes, but. Duration duration duration. The Government is going to run out of credit before the smart money runs out of patience.
Nicely struck! For a possibly relevant example, I just now heard on NPR that the largest U.S. state now has to pay higher interest rates on borrowed money than lots of Third World countries. Why Wall Street Megabanks qualify as ZIRP-worthy too-big-to-fail financial entities while the late great state of California does not is a good non-monetary policy question for the Fed’s Congressional auditors to raise. I smell lending discrimination at the 800 lb institutional gorilla level.
I pledge allegiance to the banks
of the Wall St rule of America
And new corporation for which they stand
One nation, underwater,
Insolvent
With liberty and justice for none
Whoops, let’s try that again:
I pledge allegiance to the banks
of the Wall St rule of America
And the new corporation for which they stand
One nation, underwater,
Insolvent
With liberty and justice for sale
Bravo!
Did you miss the memo that the MBS ‘price stabilization’ job has been outsourced to the two too-big-has-failed government-sponsored hedge funds, whose now-unlimited credit line from the Treasury will enable them to perpetrate all manner of financial market manipulation mischief behind the backs of, though at the expense of, the American people? Luckily some responsible members of Congress have flagged the situation and are planning to investigate.
From the linked article:
“The Treasury already has handed over about $112 billion to help shore up the companies, which were among the first big financial institutions to fall under government control in the wake of the nation’s mortgage crisis. Fannie and Freddie are playing a crucial role in providing mortgage liquidity. They own or guarantee half of the nation’s $11 trillion in home mortgages and together with the Federal Housing Administration are responsible for backing nearly nine in 10 mortgages.”
Keep on pouring money down that government-sponsored rat hole!
From a link inside the linked article:
———–
Rep. Dennis Kucinich (D., Ohio) said his congressional subcommittee plans to investigate Treasury’s decision to lift the existing $400 billion cap on government cash available to the two firms. Separately, Reps. Scott Garrett (R., N.J.) and Spencer Bachus (R., Ala.) called for the House Financial Services Committee to hold a hearing on the matter.
———–
On this blog about 18 months ago I said that what I was most afraid of was not a Congressional bailout package, but the potential that Bernanke and Paulson could bail the banks directly out of Treasury and Fed without Congressional approval. (Ben J echoed my fear.) And now we are seeing precisely that. Is this even Constitutional? Money bills must originate in the House…
And if a flying moonbat lib and a Repub from Alabama agree, then there’’s got to be a there there.
Is this even Constitutional? Money bills must originate in the House…
I’ve raised this question as well several times since this change was made.
Here’s a question - Where the F** is the Supreme Court these days? They’re supposed to be the constitutional check on this kind of thing.
I think someone needs to bring a lawsuit before the Supreme Court (now with Salsa!) can get their hands on it.
“Is this even Constitutional? Money bills must originate in the House… ”
Would an inquiry about the Constitutionality of Fed + Treasury actions to save TBTF institutions by all means they deem as necessary fall under the umbrella of questions that might compromise the Fed’s ability to conduct an independent monetary policy?
“Are you serious?”
Since the Fed and the “money” are unconstitutional, the question is moot.
Thanks for posting the article. I really hope that succeeds.
This one really snuck under the radar initially, but its importance can’t be overstated. This move itself could play a significant role in our nation’s financial undoing.
(Which at this point I think is pretty much a foregone conclusion anyway - things like this will however will serve to take away whatever fighting chance we may have left.)
“snuck under the radar initially”
Well, everyone here reach out and shake the hand of the blogger next to you! Who ‘knows’ who’s been lurking around these parts?
But why is IT the PTB keep insisting in initially trying to operate ‘just’ under the radar? Is that in their playbook? Function covertly unless and until you’re exposed and THEN come clean w/ full disclosure etc?
10-year is up big today - up 2% to 3.86.
Mortgage rates rising fast. Next few weeks’ mortgage origination numbers are going to be really bad.
TBT looking good. Just wish I had pulled the trigger three weeks ago when I brought up the subject. However it may not be too late here. Me thinking selling some TBT puts to juice the returns.
Is that the right number? It closed yesterday at 3.89 percent.
No I believe yesterday’s close was 3.78%, per Marketwatch anyhow. It opened this morning at 3.86%.
(currently down some from the open to 3.84, though still up vs. yesterday’s close)
China Property Bubble May Lead to U.S.-Style Real Estate Slump.
Dec. 31 (Bloomberg) — Li Nan has real estate fever. A 27- year-old steel trader at China Minmetals, a state-owned commodities company, Li lives with his parents in a cramped 700- square-foot apartment in west Beijing.
Li originally planned to buy his own place when he got married, but after watching Beijing real estate prices soar, he has been spending all his free time searching for an apartment. If he finds the right place — preferably a two-bedroom in the historic Dongcheng quarter, near the city center — he hopes to buy immediately. Act now, he figures, or live with Mom and Dad forever. In the last 12 months such apartments have doubled or tripled in price, to about $400 per square foot.
“This year they’ll be even higher,” says Li in the Jan. 11 issue of Bloomberg BusinessWeek.
Millions of Chinese are pursuing property with a zeal once typical of house-happy Americans. Some Chinese are plunking down wads of cash for homes. Others are taking out mortgages at record levels. Developers are snapping up land for luxury high- rises and villas, and the banks are eagerly funding them. Some local officials are even building towns from scratch in the desert, certain that demand won’t flag. And if families can swing it, they buy two apartments: one to live in, one to flip when prices jump further.
And jump they have. In Shanghai, prices for high-end real estate were up 54 percent through September, to $500 per square foot.
When the China real estate bubble pops, it will make the U.S. bubble popping event look like a picnic in the park.
But we won’t be allowed to look at it. If we think that the inner workings of AIG and GS were non-transparent, that is NOTHING to opacity of the Chicoms. After all the extenders and pretenders in the treasury can’t put you in jail for 17 years for trashtalking the economy.
“But we won’t be allowed to look at it.”
Au contraire! The cloud of smoke rising from the rubble will be visible to any man who can breathe and whose eyes can see, with the possible exception of top Federal Reserve officials.
I’m not so sure. China, at least, actually _makes_ things! People there study hard, save money, and like to work. They take raw materials and actually add value to them, building products that the world needs. We don’t do that anymore.
Me on the great wall, last month:
http://farm4.static.flickr.com/3516/4022090668_1e88f32c32.jpg
“I’m not so sure. China, at least, actually _makes_ things!”
This is well-disguised variant on the arguments that ‘they aren’t making any more land’ or ‘everyone wants to live there.’ Just because they make things doesn’t mean their real estate market cannot become wildly overbuilt and overvalued.
“in the historic Dongcheng quarter, near city center”
What, what was ‘that’ I heard? Snobbery coming from.., what was that I heard!? Wait let me guess, it’s really close to a Starbucks?
Oh I’ve heard quite enough thank you.
Hello everyone…
Home on leave now. Great to be home. Later today I am going out to buy tires for my truck, so I will look around at this housing market surrounding Fayetteville. I dont think it would be a good measure of the market as the military element changes things. I may go farther out near Kernersville…
Welcome home, Step!!!
Glad to have you safely back, just in time for the new year’s celebrations.
Happy 2010!
Great to hear you are home safe. Happy New Year!
Glad your dreams could be reached this time.
“I’ll be home for Christmas
You can count on me
Please have snow and mistletoe
And presents under the tree
Christmas Eve will find me
Where the love light beams
I’ll be home for Christmas
If only in my dreams”
Awesome that you can be home for the holidays! (at least partially).
With regards to the housing market around Fayetteville - keep in mind where the money for the job market there comes from - it’s one place that hasn’t seen cutbacks in this downturn; at least not that I’m aware of. So I venture that Fayetteville is better off than 95% of other places in the country.
Happy New Year to you and your loved ones Step… While I don’t agree with most of what our Government does at any level these days, I want you to know that you are a hero in my book.
I want you to know that you are a hero in my book.
There are a great bunch of people on this blog..
Hey Step I’d rather you be on American soil…but ya gotta do what ya gotta do….I might be driving down to Charleston in the spring…right past ya if you are home.
Happy New Year, Step! Glad you could come home on leave - I am sure your family is delirious to have you back for a bit. My son is also in the military - in his first USMC posting. He told us before TG that he wasn’t coming home over the holidays. He mentioned that he was assigned to a different job, and had been invited to Christmas and New Year’s parties. Since his on the quiet side, like me, I am happy he is finding his way. For a mother, it is a difficult matter, reading between the lines.
It is heartening to read your comments. Thank you for your service, and welcome home.
Hey Step,
Stop in Cyprus on the way back and I’ll buy you dinner
Fayette-nam rules!
My Ten Predictions for 2010 ~ Thomas Tan
Dec 30, 2009
I have been making my 10 predictions for 2 years now, since 2008. I initially got this idea from Byron Wien who has been publishing them every year since the 1980s, when he was with Morgan Stanley, then Pequot Capital , and now with Blackstone. My first picks for 2008 were accurate and had anticipated almost all major trends, substantially better than Byron’s - something I called beginner’s luck. For 2009, Byron beat me with his correct predictions. In this crystal ball reading business, no one wins them all. Nevertheless, I think it is a fun thing to do, especially when the right calls are made. I intend to continue my predictions every year, whether or not I get most of them right or wrong the year before. Without further delay, please find my ten predictions for 2010 below.
http://www.321gold.com/editorials/tan/tan123009.html
The beautiful thing about rising rates is that cash buyers like me (when I get back in a year or two) will have very little competition from loan takers.
You also have to eliminate all those folks with bad credit scores because the rising rates will be the death knell for their home buying hopes. Cash IS king (props to Combotechie)
Combotechie thanks you.
Morning Combo, first cup of java raised to you!
Pipe dream. Obama will not allow rates to rise at least for another year, if ever.
Extend and pretend really has bipartisain appeal.
Did any of you get your chia obama kit this year?
No, but I almost bought the Chia herb garden as a gift. The Chia heads are hokey as heck, but the herb garden is actually pretty nice. However, it’s not worth the $17 for three little pots. I found a better kit with 4 pots for $10 at Home Despot.
Mugsy,
While I cheer for you, I just hope you’re thinking in terms of being an “end user”. There ‘was’ a time when I entertained the notion of deploying the cash I ‘have’ toward bottom feeding for inv. purposes.., but no longer.
Just b/c we’ll have established a great cost basis doesn’t necessarily equate to great investment.
Barry, nor the FED can hold rates at zero indefinitely.
Please clarify. Did you mean, “Neither Barry, nor the Fed…,” and if so, why can’t they? What could possibly stand in their way?
Japan has kept the interest rates low for quite some time and they still have a deflationary enviroment.
Japan has kept the interest rates low for quite some time and they still have a deflationary enviroment.
Yep.
For anyone who thinks the U.S. can’t keep rates low indefinitely - I offer you - Japan - with rates at or near zero percent for 13+ years running.
If it can be done in the world’s second biggest economy - it can be done in the biggest.
“If it can be done in the world’s second biggest economy - it can be done in the biggest”.
The glaring difference is, the dollar is the worlds reserve currency, the yen is not. The U.S. is the largest debtor on the planet. Japan is not, ‘we’ will not be able to hold rates at zero for the next decade, can’t happen, unless one thinks our debt buyers are content with their return.
B.Bernake knows this as does the world market.
Amazingly though we seem to not be having problems finding buyers at our current low rates.
This is somewhat tongue-in-cheek, since it’s not clear we actually have real buyers for much of our debt - see other posts. That being the case though - we apparently have plenty of straw-buyer demand for our debt to keep prices high, and thus interest rates low.
In reality I think you’re right - that rising rates are probably going to happen, which is why in fact I have some TBT. But this to me is not a certainty by any means.
Japan has a significantly higher debt to GDP. Zimbabwe is the only country that I’m aware of at the moment with one that’s higher.
http://www.bloomberg.com/apps/news?pid=20601101&sid=aDDufj4SrzYo
Is Obama in charge of monetary policy now? I thought the Fed was running an independent monetary policy; in fact, that is the reason they object to a Congressional audit — because this might compromise their vaunted monetary policy independence. Please get your facts straight or cease posting here.
I would pay $59.95 to watch a pay-per-view boxing match between Professor Bear and Eddie.
I feel the same way about you and Eddie. Perhaps we could schedule a tag-team pig wrastling match? Do you enjoy getting covered with mud? (And get those filthy thoughts out of your mind — I am a happily married heterosexual male.)
Yea sure Obama is hands off and Bernanke is independent. If you believe that I have a nice bridge in NYC to sell you.
Do you have a shard of evidence that Obama has any influence over the monetary policy process (in stark opposition to Bernanke’s strong assertions to the contrary) or are you just blowing smoke out of your arse again?
“I have a nice bridge in NYC to sell you”.
Do you have a clear title in hand?
Knowing your mind Eddie (god help me) I know that here is plenty of sarcasm in this statement. As much as Obama wants to keep interest rates down via throwing in the kitchen sink and the future of the United States, he will not be able to do this.
I am guessing there are still some clever Republicans out there that understand the Obama, and the Democrats, have tethered their ship to the housing market. It is currently in the best interest of the Republican Party to have interest rates rise. They can take actions to block efforts of O and The Fed to keep interest rates at 0 forever. The Republicans won’t do this because it is good for the country, even though it may be. Their motives will not be so pure.
If mortgage rates are at 6% or higher at the time of the midterm elections it will devastate the Democrats. That is my firm belief. They will be seen as the party of huge debts, gifts to all special interests and still no ability to accomplish their most cherished goal (keeping house prices high). The Dems have overplayed their hand, even more so than the 2000 - 2008 Republicans, and are in a position to take one heck of a beating for it. I affiliate myself with neither set of these devils. That is just the way I see it.
“If mortgage rates are at 6% or higher at the time of the midterm elections it will devastate the Democrats.”
I like your theory a lot. I think it is imperative for the Republicans to dismantle the artificial suppression of interest rates as soon as possible, for the good of their candidates in the midterm elections.
I don’t think Dems will lose much in 2010. The stimulus spending kicks in mid-2010, nice payoffs to close districts, a few temp jobs Aug-Oct created, and 0% down, 4% mortgages will keep real estate chugging along. Plus a media that still refuses to criticize Obama ensures 2010, 2012 will be very good for them.
If the Dems lose 3 senate seats and more than 15 house seats I will be very surprised. And I see Obama winning 40 states in 2012 and Dems getting 62-65 senate seats.
Jobs versus higher interest rates — s/b an interesting midterm election, indeed!!!
“and 0% down, 4% mortgages will keep real estate chugging along”
4%? Where do you go to get a 4% mortgage?
You can get a 5 ARM for about 3.5% apr. Check bankrate.
Eddie,
Actually I also don’t think interest rates will rise substantially for another year. If they do rise, I doubt if they will go more than 25 basis points before 2011.
Rising rates will help TIPS and the variable interest on Series I savings bonds as well. Keep debt free and the world will be yours!
Did Zimbabwe issue TIPS too? If they had, would they have protected the citizens of that unfortunate country against inflation?
In other words, don’t buy arson insurance from the arsonist.
Where’s Combotechie when I need him? The arsonist is still printing money and if he cannot pay off the creditor, that would mean my gold spot price would probably zoom up past $10,000 per ounce. I’m covered with my hedge. 1/4 precious metals to 3/4 government securities.
I’m still not able to figure out why one would want the arsonist’s emissions in the first place other than to spend immediately. Why buy their promises to pay you more paper in 30 years?
Okay, just have to share another story.
We were checking out a $1MM listing (as part of our market research), that was listed as a short sale. The sellers have owned it for ~30 years, so it should be paid off, right? Nope! They’ve mortgaged it to the tune of almost $1MM. They are going to walk away from this house and buy another one CASH.
Perhaps this is where the all-cash buyers are coming from? According to many of the realtors around here, there are lots and lots of all-cash buyers.
I’ve heard multiple stories now about people mortgaging the heck out of their houses via cash-outs and HELOCs, investing/saving that money, then walking away from their albatross and plunking down cold, hard cash on a new home. I know it’s technically legal (I guess?), but how is this not theft? And the taxpayers are backing the losses in many cases!!!!
Yes, I’m mad.
In CA if a house has been HELOCed then stiffed creditors are allowed to go after the stash, at least thats how I understand the law.
Technically, yes; but many borrowers are strong-arming their lenders into granting them releases from all of their debts (forgot the technical term for the moment).
I really hope they come after these types of borrowers.
How are borrowers able to strong-arm lenders to release them from their debts? What leverage do they have that they can use?
The size of the problem is their leverage;
multiply that one home by 100,000 and the
banks just can’t do it.
I still don’t get it. If the FB has significant assets, seizing them is better than not seizing them. The lender is taking a big loss in either case.
“How are borrowers able to strong-arm lenders to release them from their debts?”
Bankruptcy.
Well certainly Kim, if the FB has little in the way of assets, there’s no percentage by taking them to court. But if they have significant* assets, there’s little reason for the bank not to get in line with the other creditors to grab a piece of the pie in the bankruptcy proceedings.
*I’m not at all sure what counts as significant here. 100k? 200k?
Firstly, they “threaten” the bank with walking away and bankruptcy.
I’m sure all the money has been stashed away in some other family member’s name by now. It’s highly unlikely they left the money in their own name, but I could be wrong.
Ca Renter ….Its the newest scam to pull equity cash and walk . On a large scale this is being encouraged by no doubt the REIC . Many sales people don’t care how they make a sale as long as they make one . If the stats of sales are increasing because of the
Equity Walkers ,for every sale your getting a foreclosure to go along with it .
When the Power that be decided to not bust and overhaul the corrupt markets
and instead decided to reward scams and pay off lenders as well
they set up more of the same corruption . The corrupt and fraudulent markets hasn’t stopped . I wouldn’t be surprised if they are back to the old tricks of cash back fraud also and double escrows .
Some people would say that this solves the problem because the borrower will end up with a cheaper house that they can afford by walking on one house and buying another at current market value . They buy the new house before they default so they qualify before their credit rating goes to shit . So ,in my view we still have very unstable markets because of all the change the bag-holder games . In the meantime the current renters are in competition with Equity Walkers for current housing stock that they might want to bid on . Oh what strange consequences you get when moral hazard isn’t considered after a Ponzi scheme bubble crashes .
Very true, Wiz. Agree with all you’ve said.
You do the checkers strategy. House number one is entirely in one spouse’s name. Heloc the h*ll out of it. Declare bk, stop paying the mortgage. Give the other spouse the cash. The other spouse buys house number two.
Credit of spouse #1 is shot, and he is judgment proof. No assets. Spouse #2 has great credit and a wad of cash. Simple dimple.
I sure would like to see some karma too.
I hear ya.
Folks like this ought to pay hefty fines (like 50% of their “take”). Or forego all rights to social welfare retirement money.
What I don’t understand is their apparent total lack of regard re: how they are shafting their own kids. Boomerism run amock. As usual.
50%? why not just take 100% and use it to pay back the loan?
I say 200% or jail time.
Everybody is gaming the system to the best of their ability. Morally wrong, but no illegal. Heck why not? The CEOs on Wall Street are taking theirs; get it while you can baby!
The banks are of course at fault as well loaning 125% of home value back in the good ole days.
The problem is not people gaming the system, the problem is our stupid and corrupt politicians backing up that kind of behavior with taxpayer funds. If some idiot bank loans out $1 million to some deadbeat scam artist then they desperately deserve to lose that money and go out of business. If I loan $100 to the bum at the corner I can’t reasonably expect him to pay me back either.
Mike in Miami,
Exactly. It’s what I like to refer to as “the creation of an entirely NEW “class” of criminal”! Here we have people that wouldn’t have dreamed… of doing so much as having an overdue library book STIFFING lenders to the tune of millions.
Aging boomers don’t give a sweet m@ther F&CK about “morality”! ( They only know it’s good not to be poor ) and ‘that’ is the only thing that matters to them. They’ve had a taste of the good life and they’re not ‘about’ to give it up!
Lender? Meet the underside of the BUS.
I know someone who is doing something like this. But rather than buy a new home free and clear, the idiot is pouring it back into the Albatross. You can’t fix stupid. Some people never ever learn.
My neighbor here in 90803, Long Beach purchased in 1997 for $379,000 and currently owes $1,400,00. The $1,400,000 is in default but she has a porche, range rover, 40′ r/v , nice boobs and a new face.
Another paid $795,000 for their home and owe $2,400,000 which is also in default.
Where did all that money go?
But that’s where the rub is ,these equity extractors are taking the money and running or buying a new place while the taxpayers pay for the loss . I guess when you see Wall Street/Lenders get
trillions in bailouts people think they are entitled to have their lot improved by bail-outs also . People who weren’t part of this fraudulent contrived mania have to pay for these jerks who actually thought that greater fools would just keep coming and buy their over-priced bubble houses they planned on making easy money one . If I didn’t know that this was happening I would think wake me up because this is some bad movie ,a absurd bad movie .
Happy New Year to Ben and all the wonderful people here at the HBB!
Let’s hope the new decade is the exact opposite of the past decade.
“Let’s hope the new decade is the exact opposite of the past decade.”
I don’t know, I really liked those pets.com Superbowl ads. Talking socks, that’s how I want my culture to be remembered.
Miami at bottom of list for job seekers ~ South Florida Business Journal
Miami ranks No. 48 out of the 50 best cities in America for job seekers, according to a new ranking by job search engine JuJu.com.
Only St. Louis, Mo. and Detroit fared worse.
Washington, D.C. ranked tops on the list with 1.87 people for every open job posted there.
Miami, meantime, had 14.47 people for every job opening posted in the city.
Orlando also was in the bottom ten, ranked No. 41 with 8.92 people for every job opening.
The job-search engine divided the number of unemployed workers in each metro area, as reported by the Bureau of Labor Statistics, by the number of jobs in Juju’s index of online jobs in the U.S.
Juju’s index is compiled and updated from thousands of employer career portals, recruiter Web sites, and job boards all over the web.
Earlier this month, the state reported that Florida’s unemployment rate for November was 11.5 percent, translating to a little more than 1 million Floridians out of work.
Washington D.C. at the top. Why is that no surprise.
Right!
Why can’t we all 320 million of us be gubmint employees?
Problem solve-ed!
Wanna bet? You do know you work for the government 4 months out of the year and don’t even get paid for it, right?
…and that there are more government contractor employees than actual government employees, right?
Right! I would not be surprised if eight out of ten of all us American workers get a check from some level of government, either directly or through a contracting firm. I am in the latter group, since government is the customer of my client. It is very hard to avoid the stigma of getting paid by the government. May as well be a starving noble crusader. But no one will admire you for not sanctioning the system. They will only snicker at you and take the high paying contracting job you turned down in order to be “consistent and admirable,” by your own definition. Unfortunately, most people will at best consider you a fool and at most retarded.
Are foreclosures that go back to the bank, like one I saw in Redmond amongst 100k houses, one real ugly one we noticed that had recently transacted at 191k. Someone paid double the going rate, and that someone was the bank. This home was purchased in 07 for 185k, no real buyer would buy a real POS for 161 per square foot, when the going rate for crapshacks is $100 in our redneck of the woods. But maybe the going rate is even less if banks are paying
double when they repo a house.
So are foreclosures helping the stats in both number of transactions and the amount that homes are going for by having the transaction of taking it from the ex-owner at whatever price they owed as a current sale? If so houses are worth even less than they seem, statistic wise
This could skew the stats in this real estate “recovery”, sure lots of transactions are occurring, but if foreclosures are counted, the price points are two or more years old, especially if the homeower took out a neg-am loan before the repo. Could a homebuyer take this skew out of the numbers, if it exists, and for instance not count next years potential 2million foreclosures in the price/quantity of sales stats?
Mike in Bend,
I also notice the banks here bidding on their properties at the foreclosure auctions. They will generally bid up to the amount of their note. I have then seen them listed for sale with real estate companies in my area. I have seen the bank pay 85k at foreclosure and then list for sale for 35K. (raccoon tracks up the white siding enter the broken window…I have a strong stomach and couldn’t enter the place).
Best I can tell is that KY is a recourse state, is that the banks can pursue the former owner for their loses. Being that KY is a recourse state is one of the reasons I think we have not had as large of a price bubble.
so the bank “bought” the property at 85k. does this skew the data? Does it count as a sale, and make it look like sales are poppin, and prices are higher than they really are?
OT: I need to consult the HBB brain trust: my littleman has no physical boundaries at daycare. His teacher says he hugs everyone (parents, janitor, visitors, etc.) and should know that you only hug people you know, with their permission. My opinion is WTF am I paying them for? Their opinion is that I need to see a developmental pediatrician.
My littleman is a lovey dude.
Their opinion is that I need to see a developmental pediatrician.
——————-
Are you really being serious???
It sounds like your beautiful son feels very happy, content and safe in his surroundings. While I understand their concern WRT “hugging strangers,” sometimes, people go overboard.
If it doesn’t bother you and your wife, tell them that you like your son to be loving, and have no problem with what he’s doing. You’ll address it more in detail with him as he gets older.
Sorry, but I think it’s a good thing when people are loving and affectionate — that includes kids! Sounds like you and your wife are doing an excellent job, Muggy!
I ditto CA renter.
Littleman is demonstrative (at this stage of his life), so he needs a evaluation by a developmental pediatrician?
These pseudo child experts need to get off all their pop child psychology. Some boys are just sweet, until the next stage.
Isn’t he about 3? Evidently, he love people. (Wait until he’s been on this planet longer.)
That day care may have had a molestation-type incident in the past and now going overboard to cover their ass.
“Are you really being serious???”
Totally
“If it doesn’t bother you and your wife”
It doesn’t, but they called a meeting with us to discuss this and to get us to take action — so there is some pressure to “change him.” When my littlegal starts in a few weeks, we will be forking over $1,500/mo. to this joint. I like them, and the facility, and they do a good job, but this threw me a curve. I’ll probably sit down with the manager again to review what we discussed.
This reminds me, my wife and I are entering a financial event horizon, whereby all of our cash will be frozen until the littleman enters grade school — essentially we will not be doing anything but getting by for the next few years. This was the driving force in our most recent look at buying. We’ll see in a few years if it was the right move. I am predicting that it will be the best decision we will make, that will set us up well for a long time, but my wife isn’t totally convinced.
Yoda: nesting a powerful instinct it is
I could see a problem if, for example, Littleman was torturing small animals or something of that nature, but hugging?
Sounds as if his teacher is the one with the problem.
Agree with combo (and I’m a former teacher who would compliment you on your great parenting skills, if your son were in my class).
One of the nicest things that ever happened to me was when I was sitting in some waiting room and a little girl came out of nowhere and hugged me. Whatever you do, don’t let anyone tell your littleman that there is something wrong about what he does. There isn’t. He has to learn that not everybody is like him, though.
Muggy - Mile-Chile is almost at seven months, and people are constantly shocked that we’re not worried about something.
And it always has to be something. Strangers, food, cars, streets, animals, relatives, everything. We’re raising a nation of wimps, methinks.
Anyway, a few days ago he was playing guitar (well, I hold it for him and he bats at the strings). When I wasn’t looking he reached for the headstock and grabbed it, poking his finger with the cut end of one of the strings.
Crying, bleeding, many tears. I was amazed at three things:
1) How much blood he bled on the guitar.
2) How quickly he stopped bleeding.
3) How quickly he stopped crying.
Anyway, I left the blood on the headstock because it is so rock ‘n’ roll, and the other part is I no longer have to worry about him grabbing the headstock. I think he remembers.
Anyway, don’t all 3 year olds run around hugging everyone?
My ten month old got her first “sickness” this week. Went to the doc, couldn’t find anything. She had a pretty high fever which kind of freaked me out, but it’s gone now.
I agree about the nation of wimps. But if you want to lay blame, it’s not parents. It’s class action lawyers and interest groups that spend 24/7 convincing parents that everything a kid will ever encounter has a 65% chance of killing them.
I cringe when I see kids in my ‘hood decked out head to toe in protective gear to ride a bike. Wrist pads, knee pads, elbow pads. They look like they’re going to play football not ride a bike.
But if you want to lay blame, it’s not parents. It’s class action lawyers and interest groups that spend 24/7 convincing parents that everything a kid will ever encounter has a 65% chance of killing them.
Uh huh, it’s not the parents …
This is so true. We are simply a pathetic society in this way. I have two little girls, 14 months old. They are, and will continue to be, encouraged to explore and find out things for themselves (within reason, of course - and safely).
They will always be given latitude to experiment and experience things and not wrapped in cotton wool in case something “bad” might happen.
It’s the ‘chickifcation” of society versus having “free range” kids. Google that, free range kids and read about a mom and a movement to allow kids a little more freedom and independence… and man, is that mom getting grief for it!
Sorry Lonestat is “WUSSIFICATION” that’s has a lot more punch…
———————————–
It’s the ‘chickifcation”
Find a new daycare. Immediately.
Muggy just my two cents which may be worth less in this economy! Dont take him to just any health care provider, but do take him out of this daycare.
Avoid the-rapists for non-issues, and feel free to disregard their insulting recommendations to you, but do remember that predators lurk where kids abound(just a fact, for example our school janitor was placed on leave for reaching up skirts looking for his broom handle, he claims). Remember, you are entrusting lower paid hourly workers to be responsible for some portion of the care and upbringing of littleman. While all he really wants, if he follows developmental norms, for the first few years, is momma. Being a stay at home dad for some years, I always remember feeling like chopped liver when mom came home and my loving care was dropped for the softer, more nurturing, mom.
Sounds like he may not be the type to hide behind your leg while you are dropping him off–too busy hugging legs of others. Not endearing behavior in a lap dog, but precious for a kid. Why daycare at all? Do you really need to miss a second of watching him develop? “Here is a video, sir, of your son’s first steps” you wanna miss milestones that occur exactly once. What price is that? Farming out care to chase the almighty$$ sems like a choice in so many situations more than a necessity, I know this to be true in some cases, but certainly not all.
Maybe their concern stems from liability issues over what happens if they accidently hired some pedaphile to take care of your kid for you, and God forbid something happens, they want to be able to say, we told you so. “He was asking for it” could be their potential defense, we told Muggy but he did not follow up on our advice and now he is culpible for whatever happens to littleman at daycare. (I don’t think that way), but that is what they could say if you ignore their advice to take him for some developmental counseling. If they worry so much about littleman learning STRANGER DANGER rather than unconditional love of our fellow man, I would find another daycare. Maybe a well screened nanny would be better than an institution where they want to make money by hiring low price parental surrogates. They are underpaid and dont care for littleman the way you would care for him, they probably are not thinking of his college education, more maybe about “what time do I get off”, this kid is smelly and I don’t feel like changing him just now.
One of the most endearing things about kids is their trusting nature, especially those who have been nurtured and have nothing to fear in life just yet. He is giving love to relative strangers, you are being asked to curb his enthusiasm?? Sounds like they don’t completely trust their staff, and want to see their rear ends covered first. My advice, feel free to ignore it, is find care that does not think of their own bottom line first, and cares more about diaper rashes (another sort of bottom line, but I digress) than liability.
Maybe their concern stems from liability issues over what happens if they accidently hired some pedophile to take care of your kid for you, and God forbid something happens, they want to be able to say, we told you so. “He was asking for it” could be their potential defense, we told Muggy but he did not follow up on our advice and now he is culpable for whatever happens to littleman at daycare.
That’s what I thought as well. Blaming the victim before the fact.
I have a friend who is a nanny, wish she could come south to help you out Muggy, she’s great. Maybe you need to find someone to come to your home. But still make sure you have nanny-cams.
If I were more cynical, I would say that the teacher is trying to drum up business for a development psychologist buddy somewhere.
I guess that I’ll be the person to point out that what the daycare operators are worrying about is that his physicality will get THEM drawn into court. We as a society have become VERY worried that any physical contact between children and adults or even between children can be construed as sexual, and therefore as abuse, or at least harrasment. And child abuse is such a terrible crime, that we as a society are not really willing to apply a standard of “beyond reasonabley doubt,” to it. We tend to assume that all accused are guilty “just to be on the safe side.”
Hi Muggy. My younger son was classic ADHD. His daycare provider and kindergarten teacher loved him, and he slept well, so we didn’t worry about anything. His first grade teacher didn’t like him, so we were asked to take him to a developmental pediatrician (translation: get this kid on Ritalin ASAP.) I am afraid of putting kids on speed to make their teachers like them, so I told her to deal with him. For the rest of grade school, if the teacher liked him, everything was cool, and if the teacher didn’t like him we were constantly in conferences. Throughout, we sat on him after school and forced him to do his homework right after school and a quick snack. If we waited even an hour after school, it was very difficult to get homework done. When he finished junior high he received no academic prizes and was voted class clown. But he was learning and sleeping well.
In high school he found things that interested and engaged him, and the behavioral issues resolved themselves. He became aware of his condition and was able to control himself. He became an A student. Now he’s a 21-year-old college senior. He is still classic ADHD - incredibly distractible and prone to outbursts. But he is focused on his work that interests him - his major.
Sorry for the long post, Muggy, but it’s obvious that you love your son and want what’s best for him. Make sure that you and your wife watch him carefully and help him to succeed. Sometimes that will involve strict discipline. You will have to realize that others aren’t as delighted with him as you are. He’ll have to learn that he’s not everyone’s cup of tea. He’ll often be rejected by other children and will have few close friends. Try lots of things with him and let him find things that he likes and is good at (mine found art and aggressive rollerblading), as opposed to what you want him to do. Share these with him, even if you don’t particularly enjoy them. I traveled all over with my son to rollerblading events and swallowed my fear until he was old enough to travel himself.
And don’t neglect your other children at the same time, while taking care not to compare them to him.
Keep your eye on the prize: an independent adult with the ability to succeed at something that holds his interest, and who cares about his family and friends.
Everything will be fine, Muggy. He has the love of caring parents who have what it takes.
They try to pathologize the heck out of kids who don’t fit in with the stereotypical assembly-line approach to education. Often, these kids have special talents or perceptive abilities that they try to persuade or drug out of them… Check out the book titled “The Edison Gene: ADHD and the Gift of the Hunter Child” by Thom Hartmann… Talks about ADHD kids having the wiring of “hunters and gatherers” in a educational world aimed at producing “farmers”.
Wow, all awesome replies. Wife just read all of this, too.
“Talks about ADHD kids having the wiring of “hunters and gatherers” in a educational world aimed at producing “farmers”.”
I am aware if this book; I think my dad read it after stressing out over me.
Daycare moral hazard problem: Blame behaviors of little people who have nothing but primal intelligence and adult supervision to guide them on the little people, rather than the absence of appropriate adult supervision.
My suggestion: Find a better daycare provider.
Put yourself in their shoes. A kid that likes to hug is a wonderful thing, but for the fact that we live in a world were an adult can be brought on charges of a child sex offense based on very scant evidence.
I suspect that is the basis for their concern, and justified, as a result of the over-reaction by the legal system to centuries of neglect to child abuse issues.
While their treatment recommendation reflects their low pay scale for employees and management, you should not take it personally. Check the source, if you know what I mean.
Stay on alert, that doesn’t sound like healthy people that are caring for your son. Beware that they fix his problem for you.
Sounds like a great kid. My opinion is that the day care providers should get out of the day care providing business. Find somebody new ASAP before these people meddle with his brain.
Nothing wrong with an affectionate child. To me, it indicates that he is very loved (well done!) and passes that along.
I’d either have a talk with the daycare director letting them know you don’t feel it’s a problem and - ideally - coming to a resolution over it, or leave the daycare. I was so lucky that my son was in a wonderful daycare from 5 months to Kindergarten! I’m actually still friends with the director and several of the teachers. Friends of mine who had kids elsewhere, however, were not so lucky and some switched facilities several times.
All that said, I don’t think it’s every too early to start to let your child know that they should never go with anyone they don’t know and that, while most people are really good out there, there are some that are not so good.
Keep up the good work with littleman!
His teacher says he hugs everyone (parents, janitor, visitors, etc.)
My wife does the same thing.
http://blogs.tampabay.com/realestate/2009/12/case-shiller-shocker-tampa-bay-biggest-monthly-home-price-loser.html
Check out this gem of a comment:
“The investment condo that I bought for $115k in 2005 (missed selling at the peak of $135k in 2006 but sold in 2007 for $105k) just went into foreclosure. The comps for that development tell me that I may be able to buy it back for $20k or so.”
Awesome investment!
So even $20K for a condo is too much for the HBB?
How big will the upcoming special HOA assessment be? The one that’s needed to cover all the non-paying units.
Yes, a $20K purchase price could be too much.
5K would be too much for me to have to abide by all the HOA ridiculous rules enforced by busybodies with too much time on their hands.
Oh mY Mr. Jones the foundation planting’s branches are 3cm too high you are in violation of the BUSYBODY CODE.
Hey, I’m with you, I’m not agreeing to that sort of stupidity. OTOH the residents there HAVE agreed to it in the (misplaced IMHO) belief that this will protect their property values. But since I have no intention of selling, I don’t CARE what the resale value of my house is. In the big scheme of things, I’d probably rather have interesting neighbors than irritating all up in my business neighbors. So I don’t have significantly more patience for “I agreed to the CC&Rs but don’t want to obey them,” crowd than I have for the “I agreed to these mortgage payments, but now I don’t want to make them,” crowd. Don’t whine to me that you’re unhappy with the choices that you’ve made.
One benefit from my bubble fence-sitting is that I got to see firsthand how those HOA boards operate. The rules are inconsistently enforced. For example the place I rented had dedicated paths for dog owners to walk the pooches. A number of dog owners let their pets poop wherever they pleased, and then did not scoop per HOA requirements. So the community had to hire a pet refuse scoop contractor - to the tune of 12k/year - to do the job the townhouse residents refused to do. The busybodies could have taken pics of the offenders, it was usually the same 20 or so people. But no, it was easier to just pay an outside contractor and go back to harassing residents whose petunia pot was not appropriately centered on the patio.
It depends on whether you are planning to be a slum lord in Detroit or San Diego, no? I would think $20K would be a mite too high in a locale where SFRs sell for under $15K.
Who would want to live next door to others who own a condo only worth $20K? The scum.
“So even $20K for a condo is too much for the HBB?”
I was referring to the original “investment.”
Smooth Treasury Auctions May Fade in 2010. ~ CNBC
The Treasury market absorbed $118 billion in notes this week without a hitch but next year, markets may not be so nice as investors worry about inflation and the growing supply of new issuance.
Traders had been watching this past week’s auctions with some trepidation because it is an unusual time of year for the Treasury to conduct auctions. There are fewer investors around and foreign buyers are conspicuously absent. Yet, the auction of 2-year, 5-year and 7-year notes found plenty of buyers. Wednesday’s auction of $32 billion in 7-years was well received with yields close to expectations and bids worth 2.72 percent the auction amount, despite the lack of foreign interest.
Some market strategists have been warning investors away from Treasurys in the year ahead, saying a rate rise could burn them. The views from the Treasury market though are diverse, with some strategists say things may not be that much different in 2010, while others see a sizeable jump in rates. Many strategists expect the 10-year to surpass 4 percent and some even see 5.5 percent in 2010.
“Everybody expects a major steepening of the yield curve, but I think we’re already there,” said George Goncalves, Treasury strategist at Cantor Fitzgerald. “We’ll have a period of higher rates but not as much as people are calling for.”
Why would possibly motivate the Fed to abdicate its l-t Treasury yield buy down program?
One possibility: Green shoots of economic recovery.
Higher l-t rates happened in 1994, and I expect they will happen again next year.
Yes the auctions are going off “without a hitch” - but the question still remains - who is actually buying them?
(warning pdf)
Also - seems apropos to repost my chart of the level of “who knows?”
treasury holders - showing the remarkable 9-month run-up.
Quite a steep zag in that chart for 2009. I am wondering if whatever dark matter explains the steep rise this year also explains the gradual rise from 1990-1995 or so?
I am wondering if whatever dark matter explains the steep rise this year also explains the gradual rise from 1990-1995 or so?
I’m wondering the same thing.
This got me to thinking about the late 90’s - specifically with regards to inflation. Might we have actually had a larger-than-published increase in the money supply during the early-90’s, as fueled by this “unknown” money source? If so - why didn’t this result in unexplained price inflation during the 90’s?
My answer to that is - look at the stock market. Once again - we did have very high inflation through the 1990’s, but it was in an asset that wasn’t measured in the CPI - stocks.
So then guess what? Interestingly - the stock market swoon of 2000-2003 just happens to coincide with the unwinding of this “other treasury issues” value. My theory is that during this time whoever held these treasuries sold them as other buyers - banks, real households, etc. (buyers that don’t fall into the “other” category) - shifted some of their assets from equities to treasuries, causing the equities market to fall.
That’s my theory anyhow. The cause and effect is unclear actually, but it appears to me that some non-public non-visible entity is manipulating the treasuries market, and probably profiting handsomely in the process. This entity is now buying like crazy, at the PTB behalf, in order to prevent a complete meltdown of the treasuries market, and by extension a meltdown of the economy as a whole, vis a vis interest rates going through the roof.
We have a friend who lives in Las Vegas - she bought out there in 2005 for a reason that I cannot fathom. I just looked on Zillow - the price listed is now about half what she paid for the thing.
Yeah, I know - Zillow isn’t really all that accurate, but still…
“We have a friend who lives in Las Vegas - she bought out there in 2005″
The house always wins…
Ya gotta see how many McCrap Shacks there are around Vegas before applying that statement to individual houses in that area. Imagine for yourself a desert basin walled in by mountain ranges, with a small area of high rise hotels in the center surrounded by vast sea of ugly, closely-spaced, virtually-identical brown stucco boxes and you will get the picture.
P.S. I should have said, “high rise hotels, many of them only half-completed,…” Las Vegas is a leading candidate for a shovel-ready stimulus project to bulldoze unneeded, unwanted tract home developments.
Instead of calling these demolition projects “shovel-ready”, they should probably be called “dynamite-ready”.
“…“shovel-ready”, they should probably be called “dynamite-ready”…”
Kerosene ready, perhaps?
“…vast sea of ugly, closely-spaced, virtually-identical brown stucco boxes…”
Ugly is not a strong enough word. Every desert town’s residential neighborhoods looks like that as it’s way too expensive to keep even a quarter-acre lot green. And there are no tall trees. That’s why I’ll always live where there is adequate rainfall most of the time.
Nothin’ could be finer than to be in …
“Ugly is not a strong enough word.”
Granted. It was the best I could do at 6a Pacific Time.
How about grotesque, hideous, homely, ill-favored, unappealing, unattractive, unbeautiful, unhandsome, unlovely, unpleasing, unpretty, unsightly, vile, disgusting, repugnant, repulsive, revolting, unimposing, unprepossessing, unimpressive, plain, unaesthetic; would one of these words be a more fitting description?
Anytime I fly over Vegas, I always get a kick out of looking at the edge of town, where, literally, you have a paved street, with McCrapshacks on one side of the street, and undeveloped desert scrub on the other.
Every other city I’ve ever been to has a 5-15 mile “transition zone” between city and country. Not Vegas.
Yeah, I know - Zillow isn’t really all that accurate, but still…
Right, Zillow’s Zestimates are usually too HIGH! “Value” is less than half what she paid.
I have been in LV the last few days, and just about every local I run into says the housing market is being “given away”:
- Bus driver from LV to Grand Canyon: “We are #1 in foreclosure and practically giving away the house”.
- Taxi driver from strip: “If anyone wants to buy a house in LV now is the time because we are giving them away.”
- Hotel front-desk clerk: “If you are in the market for a house check out the new condo building next block, 60% off so it like they are giving them away”.
The battle continues with the bank. You know, it’s almost like they are so incompetent; it feels like an episode of “The Office”. The fact that they continue to make insane amounts of money; while, at the same time being so horribly bad at their jobs really tells you something about how easy it is to make money in that profession.
So, apparently the bank didn’t foreclose “correctly” on the house we are trying to buy. I don’t know what that means, but it seems like it’s a big problem, and they are going to need to go through the foreclosure process again. I’m told several (6) months until that is complete. In the mean time, they are leaving the house on the market, and continuing to accept offers (even though we had a signed offer with an agreed upon price). I’m sure that, should another person make an offer, the bank will then again “discover” that there’s a title issue and terminate any contracts with the buyer as well.
This seems like an incredibly easy problem to fix, sell the house and clean up the title as a condition of the sale. There’s no question that the title can be repaired, it’s just going to take time. And, seriously, what in the he** takes 6 months in today’s day and age? I could build the house from the ground in 6 months. And why did they offer a home for sale that they don’t have clear title on? I just don’t understand the mentality of these folks, do they enjoy wasting my (and other’s) time? If I was the sellers agent I would be royally pis**ed right now; he sold the house and then they were unable to close the deal because they don’t have title?? Come on; trying to sell a house you don’t own seems like a bit much, even for BOA.
I’ve got a lever to help move this along (a friend who’s an executive at BOA) so hopefully things will progress a bit more quickly once I get him involved. But the ineptitude of these employees is really without exaggeration; the worst I have ever seen in my entire life! These are the people who “must be retained because; if we don’t pay our people 10M dollars a year, they are going to go somewhere else”?? Lord, I’d hate to see what the 2nd string bankers look like!!
The bank has no incentive to serve it’s customers, since there is a huge flood of money magically falling out of the sky into it’s vaults. Who needs customers ?
Sounds like a case of fraud could be made.
(Bloomberg) — Treasuries headed for the worst year since at least 1978 as the U.S. stepped up debt sales to help spur growth in an economy recovering from its deepest recession in six decades.
U.S. seven-year notes were little changed before today’s $32 billion sale of the securities, the last of three auctions this week totaling $118 billion. The Treasury sold a record- tying $42 billion of five-year securities yesterday and $44 billion in two-year notes on Dec. 28. U.S. government securities have fallen 3.6 percent this year, according to Bank of America Merrill Lynch indexes, the worst annual performance since at least 1978, when Merrill began collecting the data.
“It’s the last hoop the market has to jump through in 2009,” said James Collins, an interest-rate strategist in the futures group in Chicago at Citigroup Inc., one of 18 primary dealers obliged to participate in the Treasury’s auctions. “Yields have been trending higher. It’s been a response to increased supply.”
The yield on the benchmark 10-year note was little changed at 3.80 percent at 9:24 a.m. in New York, according to BGCantor Market Data. The yield has increased 1.58 percentage points this year. The 3.375 percent debt due in November 2019 fell 1/32, or 31 cents per $1,000 face amount, to 96 17/32. The yield on a seven-year note was little changed at 3.31 percent.
President Barack Obama is borrowing unprecedented amounts for spending programs. U.S. marketable debt increased to a record $7.17 trillion in November from $5.80 trillion at the end of last year.
I’m thinking the plan may be to uncork l-t T-bond yields, but to have the GSEs-w/o-budget-limit take over the Fed’s MBS purchase program, in an attempt to keep a lid on mortgage rates, thereby continuing the GSEs’ affordable housing mission.
Comments?
Yes. That appears to be the plan.
The PTB have an unlimited supply of various silver bullets.
(Noting that said silver bullets are all being paid for by the taxpayers, and also noting that silver prices are up a lot lately)
The silver lining: It ain’t gonna work*, due to incentives to add new layers of water to the ocean of McMansion oversupply.
*That is, unless the goal is to provide an unlimited number of empty, unwanted homes for a future shovel- (or dynamite-) ready Broken Window stimulus program to obliterate McCrapShacks from the face of the earth.
The PTB never bother mentioning whose silver goes into those bullets, either.
I like it.
You forgot to add, the GSE’s affordable housing mission, to keep prices at artificially high levels.
I think Dubai, Greece, and Iceland changed the way people look at sovereign debt. This time is NOT different. In fact, it’s worse. Our government is wasting borrowed money to prop up an asset class that will not generate income, on a bubble that has already popped.
Yes, that does seem to be the plan, which means you may be right, PB, about the Fed actually stopping QE. But “luckily”, the GSEs will be there to take up the slack, so the net result is that things will continue on exactly as though the Fed was continuing with QE.
And they say there’s no progress!
Comment by Professor Bear
2009-12-31 07:18:44
I’m thinking the plan may be to uncork l-t T-bond yields, but to have the GSEs-w/o-budget-limit take over the Fed’s MBS purchase program, in an attempt to keep a lid on mortgage rates, thereby continuing the GSEs’ affordable housing mission.
Comments?
———————
Absolutely agree with this, and this this has been the plan all along.
“think” this has been the plan…
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Fannie, Freddie proving too big to shrink.
Taxpayer tab for Fannie Mae, Freddie Mac likely to rise after Treasury’s Christmas Eve pledge.
WASHINGTON (AP) — The government’s Christmas Eve pledge of unlimited financial aid to mortgage giants Fannie Mae and Freddie Mac is aimed at making sure the housing market doesn’t take another turn for the worse and cause the economic recovery to unravel.
This insurance policy taken out by the Treasury Department will help keep mortgage rates low, and may wind up being a gift of sorts to struggling homeowners and banks. But there’s a catch: the housing crisis is now likely to cost taxpayers much more.
The Obama administration’s latest lifeline to Fannie and Freddie will cover unlimited losses through 2012, lifting an earlier cap of $400 billion. It also eases restrictions on the size of the companies’ investment portfolios. That’s a reversal of the Bush administration’s September 2008 plan to shrink the size of the companies’ holdings of mortgage-backed securities.
“Fannie, Freddie proving too big to shrink.”
Nothing like an uncapped credit line from the U.S. Treasury to offset potential shrinkage. Of course, judging from their share prices, it appears irrevocable shrinkage has already happened.
Dammit. It looks like the banker lobby got to Congress. They are clearly trying to access the shadow cash to buy up their shadow inventory. They even baited us with a measly $8K, hoping to drag in more. Nice try, banks, but Smart Money is called “Smart” Money for a reason.
I think they should let a few more big banks fail just to show who’s boss. Then pass a draconian cramdown to allow the FB’s who really want to work their way out to do so. Then bring back the 20% down payment. Then let the chips fall where …. oh, it looks like my pipe is empty…brb..
“They are clearly trying to access the shadow cash to buy up their shadow inventory.”
Spot on! U.S. Main Street = REIC bagholder and toxic MBS Superfund site provider
I never thought I would say this, but the current administration and congress makes the Bush administration look like a model of competence and honesty.
Never thought we could actually fall off the bottom, eh? Yep - it appears we can.
I’m not surprised. Just because you surround yourself with Clinton advisers doesn’t mean you will have a similar economic outcome. It’s a failure of logic and critical thinking, a failure to live in the present, a delusion.
From what I see they are more competent, but their loyalty lies with Wall Street and the dream of a future job there.
What types of loans will they buy? Is the no money down, no doc loan making a come back? Will the incentive to 1st time buyers be increased to $25K or $50K?
I think home prices are done falling, at least until this country itself goes into bankruptcy or the clowns currently in charge get removed from office.
They will throw everything and the kitchen sink at falling home prices. As long as the have taxpayer money, borrowed money and a printing press I think they will succeed. Only once the entire economic and political sturcture comes crashing down will home prices be allowed to find their natural equilibrium.
It’s George W. Obama in the Oval Office in more ways than one.
It’s Wall Street in the Oval Office. Paint whatever face on it you wish.
Well said, Blue Skye.
Developer buys bulk of Wellington condo for $4 million
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 4:49 p.m. Wednesday, Dec. 30, 2009
WELLINGTON — The Pine Cones condominium is readying for a makeover after a Dec. 24 bulk purchase of 90 of its 120 units by a developer with refurbishing plans.
The New York-based company, TopWell, LLC, paid $4 million in a short sale cash deal for the units, or about $44,444 each.
The debt owed to lender First Bank of Puerto Rico on the property was an estimated $10.5 million.
Realtors Annie Pearl, and her son David Pearl, handled the sale for Boca Raton-based Hospitality Consultants. The duo worked on marketing Pine Cones for two years, but became the exclusive listing agent in August.
“The new owners will be upgrading and renovating the units,” David Pearl said. “A lot of the units are gutted, but another large number are vintage 1980s and need to be brought up to date.”
Pine Cones, made up of two-story buildings built in 1987, is near the intersection of Wellington Trace and West Forest Hill Blvd. It was an apartment complex until it turned condo in 2007.
Priced in the low to mid-$200,000’s, just 30 units sold, and many of those went to investors.
Since then, the property had fallen into some disrepair, said Robert Goldstein, president and CEO of Hospitality Consultants.
The tennis courts need resurfacing and the clubhouse, which was serving as a sales center, will likely be renovated so it can serve as a fitness facility.
But Goldstein said the bulk sale at Pine Cones is a signal that the real estate market is improving in Palm Beach County.
“The price points are getting to the level where they are able to sustain rents and it can be a profitable venture,” he said. “We’re seeing some confidence return to the marketplace.”
“Pine Cones”. Seriously?
I used to live very close to there, and went to Wellington to play hoops every week in fact. I drove down Forest Hills Blvd, which is funny because there is neither forest nor hills anywhere close to there.
A Letter in response to my realtor telling me I had been outbid by yet another sucker who has a realtor that keeps telling them to bid higher.
I was trying to pay cash for a 04 built home, 3100 under air, needed the usual a/c unit, water system, new doors, carpet, paint, appliances.
I was trying to get it for 44.00 a square foot.
My husband is getting deployed (air guard) in March (for eight months) and I was hoping to have this settled and moved in. I guess that is not meant to be for me after all.
“Dear George,
I find it rather disturbing that banks are continuing to allow people to catch falling knives with absolute disregard for the future consequences. I feel rather certain that other realtors are encouraging people to up bid over the asking prices with no concern but only for their pay check. It is sad to think that people still put so much trust into these organizations and have not woken up yet to realize that they are being led down the garden path.
First the bubble and now the collapse of the bubble, there seems to be no difference in the corruptness and greed still there.
When are people going to wake up and realize that they are NOT getting good value because they witnessed these same homes selling for double and triple what they are now agreeing to pay. What they don’t realize is that they are still over paying. They are getting a broken house no where “pre bubble” price.
For me, I am done on my end. I refuse to speculate any further into this abyss.
We are still early in this crash, there will be much more pain yet and more tears and blood in the streets when this finally ends.
I do appreciate ALL of your hard work and dedication as my realtor and wish you a very happy New Year. You are a true gem and an honest person, please never change that part of yourself. You are the only honest realtor I have ever met. You have helped me stay strong and not get caught up and start to over bid myself. You know about the bubble, believed in the bubbles existence and its ultimate crash and the horrid things we are going to witness just as much as I do.
I think I may be looking for a new rental yet, as I reported my landlord today for homestead exception fraud. I can’t sit here and allow him to steal like that. He had almost a year to notify PAPA to tell them he had rented out this house. I am sure he is going to try to increase my rent now and I will tell him to jump in the canal.
Rents should be going down with the values crashing not going up. I could care less on his situation, his continued HELOC’s and his loss of exception are not my problem.
Warmest regards,
“Anne” “
“Rents should be going down with the values crashing not going up.”
Not true. Rents crashed during 2004-2007. It was simple supply and demand. More home buyers = fewer renters = lower rent.
Now the reverse is happening, fewer buyers = more renters = higher rent.
It’s counter intuitive that higher home prices = lower rent and lower home prices = higher rent. But it’s how things work.
“But that’s how things work.”
Unless people double up, as in extended families moving in with each other. Or folks renting out a room.
Folks renting out a room - talk about stranger danger!
There’s more vacancies of 1BRs in my area. A LL I know told me he can’t BUY a tenant for his “divorce crash pad” - a little 1 BR that divorced guys use when in transition. People are buddying up into 2-3 brs and houses that are now rentals as the owners wait for the market to improve.
Yep.
Eddie - you’re absolutely right about supply and demand.
Unfortunately for you - supply of empty rentals is skyrocketing to new records, not actually going down.
Don’t bother confronting trolls with data. They conveniently stick their fingers in their ears, start chanting “Nah-nah-nanny-nah-nah,” and ignore it.
http://news.bbc.co.uk/2/hi/business/8435745.stm
“UK house prices rose by 5.9% in 2009, making some recovery from the massive falls seen last year, the Nationwide building society has said.
Property values have risen by 117% since the end of 1999. Taking inflation into account, the average home increased by 68% in value over the decade, compared with a 14% fall in real terms in the 1990s. ”
Some crash!
Yeah - LOL - just picture me as Chris Farley on The Chris Farley Show skits on SNL, smacking my head over and over and saying “Don’t feed the trolls! You SAID that! I’m so STUPID!!!”
…supply of empty rentals is skyrocketing to new records, not actually going down.
Why is that? I posted about this late yesterday, but not many people blog at night on here. A low income co-op in my area that usually has a year + waiting list is now begging people to move in. And “for rent” signs everywhere. Yet housing inventory hasn’t changed. What gives?
The KISS theory:
eddie = Haskell
Spelling Bee contestant:
“Can you use it in a sentence please…”
1st judge, Wally Cleaver: “Hey eddie, you’re such a Haskell!”
The advent of re-partemented condos is swelling the supply of apartments. Many of the condos were originally apartments anyway.
‘“UK house prices rose by 5.9% in 2009, making some recovery from the massive falls seen last year, the Nationwide building society has said.
Property values have risen by 117% since the end of 1999. Taking inflation into account, the average home increased by 68% in value over the decade, compared with a 14% fall in real terms in the 1990s. ”
Some crash!’
Strawman statistical technique number 9,999: Carefully select the data point that best supports your position.
“It’s counter intuitive that higher home prices = lower rent and lower home prices = higher rent. But it’s how things work.”
Is it ? I just rented a very nice house for 13% less than I was paying for a very mediocre apartment. Rents in this area ( Seattle ) are coming down at an increasing pace. You left out several important terms from your equations:
Fewer buyers = Desperate Investors = More Rental Houses = Higher Vacancy Rates = Lower Rents
Fewer Employed People = Fewer Individuals Renting = Higher Vacancy Rates = Lower Rents
It sounds like your math assumes that the fewer buyers came from lots of people just suddenly deciding to rent instead of buy as a voluntary choice. In reality the choice was forced on most of them. Also, the houses and apartments they aren’t buying or renting are still in the market.
One thing I am surprised to see is that the vacancy rate is up and prices are down even in the very lowest segment of the apartment rental market here.
As a renter, I am very happy with the policies encouraging insane overbuilding of housing ( although as a taxpayer I am not ).
Lower rents were predicted on this blog several years ago.
I’ll be the cherry on this Eddie is an idiot sundae
Christmas will stretch into 2010 for apartment renters, who are benefiting from an epic collapse in the rental market and generous concessions.
Landlords are offering tenants up to six months of free rent, flat-screen TVs and new appliances. They’re also slashing monthly rates and easing application standards.
Rents fell a record 3.5% in 2009 after factoring in freebies, according to MPF Research. MPF projects prices will fall an additional 2% next year as an improving housing market and a tax credit for first-time home buyers attract more renters.
“I’ve been at this 35 years, and it’s by far the worst I’ve seen it,” says Jeff Cronrod of the American Apartment Owners Association.
Nationwide, apartment vacancy is 7.8%, up from 4.8% at the end of 2007, says MPF Vice President Greg Willett.
The soft market is mostly rooted in the nation’s 10% jobless rate. Tenants who lose their jobs are moving in with relatives or finding roommates, says economist Lawrence Yun of the National Association of Realtors.
usatoday.com/money/economy/housing/2009-12-30-rent-bargains-discounts_N.htm?csp=34
Fantastic. You can rent a decrepit 1 bedroom apartment for 3.5% less than you could last year. If that’s what you’re into, mazel tov and happy new year!
But if you want something a little more livable, you will pay more. Didn’t Polly have to move because her landlord was raising the rent? You’d think in this environment of declining rents the landlord would have bent over backwards to keep her. And you’d also think sbk’s landlord would spend $5 to fix the screens.
Odd.
So your N of 1 should satisfy us??
The place I rented a couple of years ago was being advertised for almost 10% less than I was paying. I should note that the landlord had wanted to jack up my rent too. I called his bluff and left. I think the landlord is now living in the unit.
Wrong, Eddie. Rents are going down along with house prices. You forgot to factor in job losses and investor knife-catchers. Simple supply and demand . . .
Sure, Eddie. Whatever you say. Like I said the other day, go all in, dude. What’s holding you back?
{Tee hee}
SKB, sorry to hear it didn’t work out for you for the short term. Good luck to your husband. Hang in there…
SKB…dba “Anne”
If your air guard husband is even half as smart and tough and practical as you are then everything will turn out well for all of you.
Keep up the fight, and if possible have fun at it.
Eddie, thanks for making my day, really…
I am already paying 1500 per month on this place. I guess I am screwed on both directions now.
What a year I have to look forward to, husband’s deployment, stuck in a rental with a landlord to broke to fix screens on my house.
Ready to pay cash but keep getting out bid by someone with NO money down to my CASH offer.
Thats right NO money down, this bank (Flagstar Bank) carrying the REO is offering this.
Look:
https://www.flagstar.com/personal/home-loans/AffordableHousingLoans.html
Seems like a pretty expensive way to avoid paying $2 yourself to fix the screen.
OK skb, you have to calm down! You have two lovely options. First one is that you can find another rental for less. Ignore what Eddie says because it is wrong. The second is my prediction for what is left of the winter: the banks will release foreclosures at a higher rate for the first two months of 2010. I think that this will happen for several reasons: 1) they’ve been holding on to a lot of foreclosures for a long time; 2) a lot more houses will be foreclosed on in 2010-2012; 3) banks don’t want to ruin the spring buying season by competing with the usual uptick in non-distressed sales.
One caveat: banks will price this year’s foreclosures higher than last winters’ foreclosures. So don’t bid them up. Hold your ground, girl. If you don’t panic, you’ll win in the end.
That’s right skb. Don’t believe what you see with your own eyes. Instead believe what someone on a blog is telling you should be happening instead.
This supposed massive wave of bank properties hitting the market is like the lochness monster. Many people claim it exists, but nobody has actually seen it.
It’s called Craiglist, Eddie-pup. You’re a scream.
So the “shadow” inventory is on craigslist? HA HA. Not much of a shadow then.
Come on make you your mind. Is there a secret stash of houses the banks are secretly holding on to? Or are they on craigslist.
Once again the HBB talks out of both sides of its mouth.
I understand though, it’s 12/31 and you’re starting the festivities early. It’s cool.
‘This supposed massive wave of bank properties hitting the market is like the lochness monster. Many people claim it exists, but nobody has actually seen it.’
‘Instead believe what someone on a blog is telling you’
You answered your own question, as usual. While you anonymously hand out bull shit, millions of ‘landlord/investors’ are underwater in this country and millions more will default this next year.
Here’s a challenge for you; use your REAL, full name, go out and buy as many houses as possible and rent them out, and give us all the details. Then, when you get your ass kicked and go crying to the local paper, I’ll post your whining on this blog.
Come on, back up your mouth with some action!
‘This supposed massive wave of bank properties hitting the market is like the lochness monster. Many people claim it exists, but nobody has actually seen it.’
Laughingly - even RealtyTrac sees what Eddie doesn’t.
“While you anonymously hand out bull shit,…”
I would like to offer my sincere thanks to Ben for taking this 2009 parting shot at the HBB’s pet troll!!!
RealtrTrac….they don’t have any biases now do they? Where are all these supposed homes just sitting around? Do I need special x-ray goggles to see them?
RealtrTrac (sic)….they don’t have any biases now do they? Where are all these supposed homes just sitting around? Do I need special x-ray goggles to see them?
Cripes man, could you possibly be any more dense?
RealtyTrac has the actual listings on their website, with addresses and a map link for each. No x-ray goggles needed. If that’s not good enough for you, then you’re an even bigger idiot than most of us here believe, which is saying a lot.
Where are all these supposed homes just sitting around? Do I need special x-ray goggles to see them?
No. Just pull your head out of your ass for a minute and you might actually experience reality.
If you take a close look you’ll see a lot of double counting on that and other foreclosure websites.
Example:
Willow Ridge Dr # 103 in Pasco County, FL. Posted twice.
or how about County Road 54 E # 2210, also posted twice.
This is from 1 page i randomly selected.
They have have foreclosures there from May 2008 that are “NEW LISTINGS”.
You people cannot be so gullible as to believe that data there.
Yep Hbb is gullible
We should not trust realty track or the other articles showing that rents are falling, we should trust Eddie’s observations.
Willow Ridge Dr # 103 in Pasco County, FL. Posted twice.
That’s a multi-building apartment complex, with lots of units that are numbered 103, so quite feasible.
Nevertheless - even if there are duplicates, you can’t possibly ignore the scale, or the thousands upon thousands of articles of the massive amounts of foreclosures. Or the direct contact with tons of people who have been involved in foreclosures in one form or another.
Or have you been living in a cave, with no outside contact?
OK, then how about this one… Oh, I forgot, USA Today is a commie/doomer rag with a known anti-real estate agenda.
Apartment renters win as vacancy rate climbs
By Paul Davidson, USA TODAY
http://www.usatoday.com/money/economy/housing/2009-12-30-rent-bargains-discounts_N.htm
Eddie-pup, you’ve been proven 100% completely, verifiably full of shit on this one. A phrase about holes and digging comes to mind.
Proving SpecialEd wrong is quite easy. You’re the eleventybillionth person who has done so.
“Yep Hbb is gullible”
Moreover, Eddie is omniscient, and the only poster here who has not drunk the gloomster kookaide that all the rest of us who read and post here have drunk.
(Rechanneling EddieTroll): If you believe that I have a nice bridge in NYC to sell you.
I’ll second REHobbyist with regard to rent prices. As someone who just culminated a 6-month rental search for a longer term “away from home” work apartment (we had been staying in temporary suites), I’m happy to report that street rental prices have plunged and continue to do so, supply is substantial, and everyone is dealing. It’s a great time to rent!
One contributing factor in our area is the ongoing reversion of empty condo buildings back to apartments, because they refused to sell at the market-clearing prices of $.30-.50 of their original asking dollar.
Surprised no one’s commented on crude’s recent run back up - it’s right at $80 again; up from $71 just three weeks ago. And this is with a strengthening, not weakening, dollar.
“Surprised no one’s commented on crude’s recent run back up - it’s right at $80 again; up from $71 just three weeks ago. And this is with a strengthening, not weakening, dollar.”
Strengthening against what ? The pound and the yen ? My wife is Chilean; we are visiting in Chile now. The dollar is wilting here against the Chilean peso. Most of the banks refuse to change dollars. Traveller’s checks are a joke; the best rate I can find is less than half the official rate. I can still use a credit card or ATM without getting screwed too badly.
Yeah I know what you mean.
I was speaking more to the new behavior compared with a few months ago, when high crude prices are accompanied by a low dollar index.
The dollar index is indeed primarily against the Euro - which of course is another very weak currency.
Really? faux news wsj has this headline for the last day of the year…
OIL FUTURES: Crude Up; Weak Dollar, Oil Stock Draw Supports
No worries… the “invisible hand” of “Suppy & Demand” & “Free Market Efficiency” will make certain that end users get a “fair price”
(AFP) – 5 hours ago
LONDON — World oil prices, which have soared about 70 percent this year on global economic recovery signs, rose on Thursday as solid US demand underpinned the last trading day of 2009, analysts said.
Declining stockpiles indicate strengthening demand in the United States, the world’s biggest economy and the largest consumer of energy.
“It produced a (New York oil price) average of about 62 dollars per barrel, encompassing a low of 33 dollars per barrel and a high of 82 dollars per barrel, with prices finishing the year close to the highs after a steady ten-month climb.”
The OPEC meeting capped a year of recovery for oil prices, which have more than doubled since the cartel set strict quota cuts in the depths of the economic crisis a year ago.
Must be all the JOBS created for Americans since this post 10 months ago that is “contributing” to the “Demand” side of the oil calculus equation:
Comment by Hwy50ina49Dodge
2009-02-11 11:19:53
What’’s that called?…when you “choke off” the supply to increase the price…
Exxon: “Hey Chevron, what price do you think we can get folks to tolerate?”
Chevron: “I don’t know, but I’m quite certain $4.60 per gallon won’t work…ask Mobil.”
Mobil: ” We’re thinking folks can pay $2.50, what do you think Texaco?”
Texaco: “Well oil price are going lower, what kind of an excuse can we make up that sounds plausible?”
Valero: “Come on you guys, we lost some volume, we have to make it up somewhere right?”
“…Refiners took in 214,000 fewer barrels of crude last week and gasoline production fell, the EIA reported.”
“…The companies that own refineries are seeing the same dour headlines about job losses, and have slashed production as they try do match supply with demand.”
“…That means there is less gas on the market, and consumers are seeing that at the pump.”
But they told me oil only goes up in price when Republican oil men are in power! I’m so confused.
Dubai World has financial problems $$$$$$$$….let’s connect some dots…
Cheney-Shrub…Halliburton…Oil…Saudi Arabia…Oil…Kuwait…Oil…Kingdoms…Oil…slight adjustment to oil price/supply control knobs…Americans still paying $2.50+ per gallon…
Dubai financial problem receives “loan modification” = problem solved
So Cheney-Shrub still controls the Saudis! I get it. Bad Cheney-Shrub! Bad!
If only it were that simple. The whole point of cap-and-trade is to raise the price of petrol by a whole lot, so people in the industrial nations (US in particular) will use much less. I actually agree with the concept, except I don’t see the need for all the governmental superstructures to force things, and have Megabank Inc. skim trillion$$ off the top. (Read up on what Goldman Sachs thinks about cap-and-trade. At least evil big oil produces something of use, unlike Megabank.)
If cap-and-trade supporters would stop lying about their true intentions, I might even support them.
Let me help you out there. Republican oil men are no longer in power.
I have a question about a Trustee’s Sale:
When the sheriff holds an auction on the courthouse steps, is this just in satisfaction of a lien for property taxes owed? I am sure a local
government has no interest in property management.
Also, if a house doesn’t sell and it goes back to the bank, does the municipality get its lien fulfilled by the bank/beneficiary?
Trying to grasp fundamentals. Thx.
[aka goedeck]
Love your handle. Are you per chance originally from Kansas? (My American soil roots are there…)
Clint Eastwood:
“I’ve heard there’s three kinds of suns in Kansas, …sunshine, sunflowers & suns-of-itches”
Had dinner at his Tavern in La Quinta last night, most excellent ribs…
Like a lot of places in America, Palm Springs is a GREAT place to VISIT!
sheila bear,
Here in KY after a trustee sale all liens are satisfied (cleared) with the exception of US Gov liens (think taxes owed the IRS as an example). The bank who holds the mortgage is usually one of the bidders and will bid up to the amount they are owed. Not all states are like this. I have found you can talk to the trustee, or the folks in the sheriffs office that conduct these sales and they are very helpful to give you the information on what you are getting and what your obligations would be. They have no vested interest other than being a member of the community also.
Big Blue to cut jobs to save big green.
IBM’s ‘work-force rebalancing’ will trim $400M.
Times Herald-Record ~ December 31, 2009 -
IBM plans to trim $300 million to $400 million from its payroll in 2010 — the same amount it cut last year when more than 9,000 U.S. workers lost their jobs.
Through layoffs, attrition, retirements and firings, IBM eliminated more than 1,000 positions in Dutchess and Orange counties in 2009. That brought the company’s mid-Hudson payroll below 10,000 workers for the first time in a decade.
The company refers to the shifting of its payroll as “work-force rebalancing.” Shifting can mean both layoffs and transferring employees between the United States and overseas sites.
Last January, CFO Mark Loughridge said the company expected that shift to save IBM $300 million to $400 million in 2009. For IBM, that’s “kind of the normal range that we run every year,” Loughridge said, with 2010 being no exception.
About 65 percent of the money IBM makes comes from outside the United States. “Our growth overseas means that this U.S.-based company is able to compete globally,” said IBM spokesman Doug Shelton this week.
So what is IBM (and HP, Dell, Cisco, etc.) going to do when they run out of Americans to fire? Start firing Chindians and replace them with even lower paid 3rd worlders?
And this is why the recovery is coming along so well. All the big companies are laying off employees, so they’re wayyy more efficient!
“…And the Wichita Lineman, is still on the line.”
But not for long. “AT&T asks FCC to drop required support for landlines”
www dot mobileburn dot com/news.jsp?Id=8469
I see nothing here the PPT cannot “fix” by day’s end. It would be altogether inauspicious for 2010 to let 2009 close with a massive stock market selloff. In fact, I will not be at all surprised to see the headline US stock indexes close right on top of their opening bell levels today, same as yesterday.
Happy New Year to all of Wall Street’s bovine-brained greater fools!!!
Bulls take new year’s leave
Wall Street dips at start of final session of the decade and of 2009, a year that investors can take satisfaction in knowing is on track to score the largest gain — a touch over 20% — since 2003.
Not much of a Santa Clause rally. You know what that means…
Higher long-term interest rates ringing in 2010?
Joshua trees and real estate scams!
I’m reading the old WPA guide to California, published first in 1939. In it is detailed the land scam of Widneyville-by-the-Desert, circa 1885. Nothing there but desert and Joshua trees. Enterprising realtors stuck oranges onto the spines of the Joshua trees and sold acreage to greenhorn investors as “an orange grove”.
The WPA guides are a great historical snapshot of the US in the 1930’s.
Here’s my report from Palm Springs:
Let’s start with “things-most-likely-to-see-in-abundance” category:
1. 50% discount
2. For lease/vacancy
3. joshua trees
(Hwy notes the weather is most excellent, 70/48 …makes hiking in “The Tree” quite pleasant)
Yeah and I could stick a blinking star on my head and call myself a Christmas Tree.
Apparently Widneyville now Hesparia.
Here’s a photo of the “fruitful” Joshua trees!
http://www.wrightwoodcalif.com/forum/index.php?topic=10801.0
OK - I had a thought last night. It’s scary, I know.
Yesterday there was some discussion about ways that the PTB are pumping as hard as they can to keep the housing bubble going - MBS purchases, holding off shadow inventory, etc. So here’s my thought:
Might there be a chance that we’re soon in for another housing price bubble that’s as big, or even bigger, than what we just came though?
Bear with me here.
I put this out there based on two main thoughts:
1. Incentive: Inflation and interest rates.
I’ve stated a few times that my view is that we actually had *very* high inflation in the 1997-2006 period, but this wasn’t measured in the CPI, because CPI doesn’t actually use home prices, it uses rent equivalent - and of course rent equivalent just didn’t grow that much in that period because everyone wanted to buy house instead.
Now however we have this big fear of inflation - as measured by CPI, due to the big increase in money supply. As a result, there’s pressure on the Fed to eventually raise interest rates to combat inflation. The problem is - raising rates will just kill the economy, including contributing to the national debt itself due to increased borrowing costs. So my thought is that the Fed really, really doesn’t want to raise rates at all, or at least significantly.
So - how to avoid raising rates? One means - mold inflation such that high inflation really exists, but isn’t measured by CPI. If CPI shows that inflation is still low - then the pressure’s less on the Fed to raise rates.
But - how to do this? Bing!!! Just do the same thing that was done 1997-2006 - funnel all the new money into housing; making house prices go up much more than other things. Voila - we have actual high inflation, but not measured by CPI. CPI remains low, the Fed keeps rate low, and everyone’s happy.
2. Means: MBS purchases and shadow inventory.
The big problem of course is basic supply and demand. There’s a huge and still-growing supply of empty houses out there pushing prices down. Additionally the credit to buy the houses is tightening since prices are still falling and the banks are taking losses.
So - just reduce the supply of empty houses. What matters isn’t how many empty houses exist - what matters is how many empty houses are on the market. So if the banks, Fannie and Freddie, etc. just hold empty houses off the market, they can force prices up. Even though this is artificial - it can be done indefinitely as long as the banks remain solvent. Well - as we can see from the removal of the F/F guarantee cap, things like TARP etc. - the government has no intention of allowing insolvency of the big banks. They don’t have to sell their shadow inventory immediately, because they have enough other means of making money now to offset the loss of mortgage payment income. This goes hand-in-hand with the MBS purchases of course; the banks themselves aren’t taking the hit on the unforeclosed houses - the GSE’s are. The MBS purchases also allow the banks to loosen their credit, which provides the means for people to buy these new houses in the new bubble.
My main theory is that the PTB at this point is desperate to keep the party going. The very survival of the financial system - and of their power itself - relies on it. And I think that this may be the only means to do it - via Housing Bubble 2. There simply isn’t another asset class big enough to inflate further to take the housing bubble’s place. Equities might have worked, but they’re already at bubble levels. Commodities are also high, and aren’t a large enough portion of investments to soak up the extra money. They have to re-inflate the housing bubble, or die. And I have an increasing suspicion that they actually do have the means to do so, at least in the near future.
Long term it may all blow up again, and this time for good. Who knows.
Also please know that I’m not proposing that this will happen - I’m just putting it out there as a possibility of something that I think might happen. Up until recently I wouldn’t have thought there was any way the bubble could really be reinflated - market forces are just too stacked against it, and the PTB are just not that omnipotent. But now I’m not so sure.
Thoughts?
Packman: most of us on this blog underestimated the measures that Wall Street and Big Government would take to keep the ponzi from collapsing. They are trying hard to reinflate the bubble, but so far have only succeeded in slowing its deflation. Time will tell what happens, but you could be right. Meantime, be very careful with your money.
Cash is king for me now (finally, Combo!)
They are trying hard to reinflate the bubble, but so far have only succeeded in slowing its deflation.
I wouldn’t be too sure about that.
Prices actually are starting back up - even in inflation adjusted (as measured by CPI) terms. So the PTB have already proven they can beat the market fundamentals, at least for several months.
Whether they keep going up remains to be seen. My thinking is that they’ll indeed start heading back down this winter, however we may be in for another bounce up next summer, bigger than the one this year.
“…however we may be in for another bounce up next summer, bigger than the one this year.”
This depends critically on what kind of newly-announced and unprecedented housing market price support measures the Obamanomics Dream Team implements between now and next summer, no?
“Prices actually are starting back up…”
Way to early to say if that little blip represents the start of a new l-t upturn or a stimulus-driven dead cat bounce. The gambler in me prefers to maintain the latter hypothesis until a preponderance of evidence suggests otherwise.
Successive waves of a mania are weaker and weaker, as in a shrinking pool of fools. The best the PTB can do to goose the next wave is to decieve as many as possible that inflation is knocking at the door. It might be in their interest to manipulate the CPI upward now, to hide deflation.
Collapsing the debt bubble must be a worse outcome to the g’ment than armed revolution.
The best the PTB can do to goose the next wave is to decieve as many as possible that inflation is knocking at the door. It might be in their interest to manipulate the CPI upward now, to hide deflation.
You’re right, except CPI data reflects current inflation. It’s a very delicate balancing game. What the PTB needs to do - and is doing successfully, is promote the idea of high inflation expectations, but somehow not let us actually get there to the point where we actually have high inflation now. This will encourage the buying of houses as a means to protect from inflation, but not to the point where they have to raise rates.
Japan, BTW, is providing a perfect setup for this - see the posts above. Japan has had near-zero rates for 13+ years, without inflation - in fact is currently experiencing a bout of deflation. What they won’t point out however is that Japan is an export-driven economy, with their main customer being us, and that’s why they’re experiencing deflation; because of our current crash. Thus providing zero-interest loans to only the Japanese - the producers not the consumers - isn’t going to cause inflation. That’s not true for the U.S., until we cease to become a consumption-based society.
If deflation in Japan is due to our current crash, then why were they in deflation at the height of our consumption?
They weren’t.
Japan’s CPI has been flat, right at 100, since 2002. They had a period of slight deflation before that (104 in 1998 -> 100 in 2002). So our boom caused them to go from a period of slight deflation to flat, to now deflation again after the crash.
(Though again just slight deflation - now 99.8, from 100.4 two months ago)
It doesn’t fix the problem of affordability problem.
Even if they reduce supply they need to figure a way to get buyers to purchase the homes, Subprime lending, ARMS, etc are gone. I guess tax credits are an attempt at improving affordabillity, but the 8k wad appears to have been spent.
If they want to keep cpi low but cause real inflation this way they will have to rent out the excess inventory. Thus the consumer will see falling rents. Will this increase their desire to buy???
Subprime lending gone? Nope. Just shifted to Uncle Sam.
(I realize that’s an op-ed piece. It’s spot-on nonetheless.)
Will this increase their desire to buy???
The desire to buy in the mid and latter stages of the first bubble was very much not driven by price, but by price change - as in housing as an investment. The same would be true this time. Affordability’s got nothing to do with it.
“…not driven by price, but by price change - as in housing as an investment… Affordability’s got nothing to do with it.”
And the inability of residential RE to replicate its recent stellar bubble price blowout in the near term has a lot to do with why many recent buyers got stucco.
‘…op-ed piece…’
I like the attribution: “By” (???)
“Collapsing the debt bubble must be a worse outcome to the g’ment than armed revolution.”
Do you perceive these outcomes as somehow mutually exclusive?
It’s not going to work. It doesn’t mean they won’t blow up the Treasury market trying, however.
Surprise! Surprise! I’m seeing some failed foreclosure sales come back on the market. It means they were either overpriced to begin with or the buyer simply could not qualify. Imagine that — 50 pct off peak prices, low interest rates, government subsidies to buy, and still failure to close.
After the politicians make their victory lap, we’ll see another crash, somewhere. This time is NOT different.
“After the politicians make their victory lap,…”
…or their ‘Major Hostilities Have Ended’ speech on the deck of the ship.
I’m looking forward to 2010. Happy New Year to Ben and the HBBers! You have given me excellent financial advice and encouraged patience, both to my great benefit!
All the best this coming year REhobbyist, be safe!
My motto for 2010: “Keep Americans safe…protect CORPORATIONS!”
I liked the cowboy prayer you posted last week.
3 reasons home prices are heading lower.
NEW YORK (CNNMoney.com) — After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they’ll soon start to fall.
But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.
“We’ve seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit,” said Pat Newport of IHS Global Research. “But there are really good reasons to think prices will now start going down.”
There are three main reasons for the reversal: a coming flood of foreclosures, rising interest rates and the eventual end of the tax credits.
More foreclosures
For Gus Faucher, the director of macroeconomics for Moody’s Economy.com, the huge number of foreclosures that remain in the pipeline is the big problem.
Moody’s upped its estimate of defaults recently because of shortcomings of the government-led mortgage modification programs. Trial workouts are not being made permanent and completed modifications are redefaulting at high rates.
“There are going to be fewer [successful] modifications than we thought,” said Faucher.
Even so, he added, much of the price decline has already occurred and Moody’s forecast is for only another 8% drop. The worst-hit markets will be the ones suffering the most foreclosures, places like Arizona, California, Florida and Nevada. (See 7 tips for buying foreclosures)
Resetting option ARMs (adjustable rate mortgages) will also aggravate the foreclosure problem. These mortgages allow borrowers to pick their own payments, which can be so low they don’t even cover the interest. Balances swell.
For many of the more than 350,000 option-ARM borrowers, it’s time to pay the piper. Their loans will change into fully amortizing mortgages that will carry much higher monthly payments. A very large percentage of these homeowners will default, according to Shari Olefson, author of “Foreclosure Nation: Mortgaging the American Dream.”
“We’ve still only seen the tip of the foreclosure iceberg,” she said.
She also predicts more strategic defaults, people deliberately walking away from even fixed-rate mortgages as the value of their homes dips well below the amount they owe.
Olefson’s forecast is for price declines of 5% to 15%, depending on the area, with a national median price drop of about 10% for 2010.
“For Gus Faucher, the director of macroeconomics for Moody’s Economy.com, the huge number of foreclosures that remain in the pipeline is the big problem.”
How about the disconnect between median income v. home prices, Gus?
Free funerals for drunk drivers ~ Dec. 30, 2009
ROME, Ga., Dec. 30 (UPI) — A Georgia funeral home says it is offering free services and burial for anyone who plans to drink or do drugs before driving on New Year’s Eve.
Jennings and Miller Funeral Home in Rome said its doors are open for citizens to come in before noon Thursday and sign a contract stating their intention to drive after using alcohol or drugs. If the motorist is then killed while driving Thursday evening, the funeral home will prepare the remains and provide a casket, funeral, hearse ride and grave space, the Rome News-Tribune reported Wednesday.
Awesome! A publicity stunt and a public service statement wrapped into one. I like it! (seriously)
My home state does me proud again.
At least Tech is in the Orange Bowl.
“…its doors are open for citizens to come in before noon Thursday and sign a contract stating their intention to drive after using alcohol or drugs.”
It’s Georgia right? The South right?…My take: The local police chief is his BIL, the local judge is his FIL,…theys be lookin’ to “create” city revenue $$$$, soon after the the ignition key is turned on…being that they have the “confessions” ready in hand!
I have not been checking the blog the last week or so (been in AZ, NV and CA) thus don’t know where Eddie is, but apparently he has not stayed in any hotel or restaurant recently because both industry indicators are down again in the latest available data:
- In year-over-year measurements, the industry’s occupancy fell 5.4 percent to end the week at 33.8 percent - the lowest weekly occupancy rate on record. Average daily rate dropped 8.0 percent to finish the week at US$85.78. Revenue per available room for the week decreased 13.0 percent to finish at US$29.02.
- The National Restaurant Association’s … Restaurant Performance Index (RPI) … stood at 97.8 in November, down 0.2 percent from its October level. In addition, the RPI remained below 100 for the 25th consecutive month, which signifies contraction in the index of key industry indicators.
Do you mean to suggest high rolling Fast Eddie missed an entire week without visiting Vegas?
And yet on Orbitz for next weekend, which is one of the slowest times in LV, Venetian is $400+, Pallazo is $500+, Wynn is $479 and Mandalay is completely sold out.
Indeed, the travel industry is dead.
I know somebody that bought in Vegas in ‘05 for $340,000. She says the current price she could get is $139,000. Yes, it really is a wondrous place. She will be warmed by your glowing economic forecasts.
It’s not my forecast. It’s the going rate for a hotel room for one of the slowest weekends of the year. Don’t shoot the messenger.
Eddie - the Consumer Electronic Show is in Vegas next weekend, heard of it?
I’ve recently gotten spam from MGM Grand for $51 mid week room rates as well as equally unprecedented discounts for Bellagio, Venetian and Mandalay Bay.
Great time for non-Tarp companies to have corporate meetings in Vegas!
Eddie,
I love you man! You help me practice tolerance, patience and kindness to all. It’s my 2010 New Year’s resolution.
If you call those hotels directly and actually try to book something, you’ll find rates are way down. Hotwire, Orbitz, all of them, are quoting inflated and inaccurate pricing for many properties - which is sort of interesting.
Obviously they quote one price for stoopid people and a lower price for smart ones.
Vegas is hurting pretty bad…all the big players and most of the small ones are on the verge of bankruptcy…
They are even closing towers to keep costs down.
Fecaltime!
I was struck during my drive through The Strip this past Tuesday just how many high rises looked as though construction effort came to a grinding halt at the point when they were half-completed. One place in particular grabbed my attention, as the sign in front of the half-finished high-rise tower boldly announced, “Opening in Fall 2009″ — oops!
Lost Vegas = Dubai west…
My friend’s photo and caption is on the NY Times decade in review:
http://www.nytimes.com/interactive/world/2009-decade.html?hp#/2001_9_31634
Yikes, what a photo. That’s almost Pulitzer material.
mikey and Leigh Song,
Another problem with the codos in Edgerton…none have sold although there is “lots of interest.” Also, there have been accepted offers, but persons cannot get financing. Finally, the prices have been cut about 40K, but still not in line with either local rents or wages….but the new agent is hopeful and wants to market to persons that cannot afford Madison (but can afford the extra $200+ per month for commuting).
http://gazettextra.com/news/2009/dec/30/edgerton-development-struggles-fill-space/
Hanjin Heavy to cut workforce by 30 % ~ The Korea Journal
Hanjin Heavy Industries and Construction Co., Korea’s fifth-largest shipyard, said Thursday it plans to slash its shipbuilding workforce by at least 30 percent to help overcome a management crisis arising from a worldwide recession in the industry, according to the Yonhap News.
The plan calls for the company to begin layoffs in its shipbuilding unit in February next year and spin off part of its technology group.
“The company did not receive any new ship orders this year and we are not structurally capable of taking on low-priced orders at the moment,” it said. “For the survival of the company, layoffs and workforce restructuring are inevitable.”
“Management Crisis” due to a lack of orders???
“Management crisis” must mean that they don’t get their bonuses, unless they find another way to juice the numbers…….like laying of 30% of the Kim6Packs.
Used car donations in decline.
Business First of Buffalo ~ December 31, 2009
Stuart Harper isn’t taking in as many used cars as he used to.
Harper, who is executive director of the Buffalo City Mission, said donations of used cars to his organization has dropped off. The cars, he said, usually are from the mid-to-late 1990s with more than 150,000 miles on them.
After the cars pass inspection, he said, the City Mission auctions them off or sells them. Money generated helps support the mission.
“We went from getting around 20 cars a month to around three,” said Harper, adding the cash generated from auctions or sales has negatively affected the City Mission’s bottom line. He cites the government’s Cash for Clunkers program, and the fact that people seem to be hanging on to their cars longer as possible reasons for this.
The City Mission’s annual budget for 2009-2010 totals $4.679 million. Of that, Marper projects money generated from donated cars to comprise about 1 percent of his budget, versus 5.5 percent in previous years. The City Mission’s fiscal year runs Oct. 1 through Sept. 30.
Harper estimated three cars would generate around $1,500 a month.
A collapse of the Japanese government-bond market “is going to happen; it’s a question of when,” said Kyle Bass, head of Hayman Advisors LP, a Dallas hedge fund, who has placed wagers on that outcome. He and others, such as David Einhorn’s Greenlight Capital Inc. and a fund run by Daniel Arbess of Perella Weinberg Partners LP, have been buying a variety of investments that could pay off if the Japanese bond market crumbles.
Betting against the debt of various nations such as Greece and Ireland has proved a popular move during the past several months as worries have mounted over deteriorating government finances in the aftermath of the financial crisis.
But a selloff in Japan’s bonds would be much more worrisome than woes in some other countries, because of the size of Japan’s bond market, 694.3 trillion yen, or about $7.543 trillion, and the role Japan plays in the global economy.
“In Japan, the mist has subsided and you see this huge mountain of debt,” said Tom Byrne, a sovereign-credit analyst for Asia for Moody’s Investors Service. That has raised concerns among some that “this could blow,” although Mr. Byrne doesn’t believe that will happen.
WSJ: Bond Investors Bet on Japan’s Day of Reckoning
Japan’s bonds could collapse! Watch out below!
and
“This thing could blow”! “the bonds will crumble!”
I love this type of writing.
Washington Times slashes news staff 40 percent, ends sports section; managing editor also cut.
WASHINGTON (AP) — The Washington Times slashed its staff by more than 40 percent and will eliminate its sports section and most local coverage in 2010, shifting its focus to politics, business and investigative reporting.
The 27-year-old newspaper announced the latest round of layoffs in its Thursday edition and said the last sports section would appear Friday. Among those let go was the newsroom leader, Managing Editor David Jones. Another round of cuts was made earlier in December, and the newspaper published its last Sunday edition last weekend.
The paper will publish a new weekday print edition starting Monday. It will focus on the newspaper’s core strengths, including politics and cultural issues, President and Publisher Jonathan Slevin said Wednesday in a statement.
“Our market-based, forward-looking plan is both a response to the recessionary economy, continued downward financial pressures on the news industry and our transition into a 21st century multimedia enterprise,” Slevin said.
The Washington Times is killing its print edition altogether in a few months. I know someone who tried to renew their subscription but couldn’t. They’re no longer taking them.
It’s a shame, though the WaTi is actually a really crappy newspaper, with *very* shoddy reporting and the most right-leaning bias I’ve ever seen of any semi-major paper. I got a subscription last year actually - switched from the Post as I just couldn’t stand the constant Obama gushing in the Post - it made me physically sick. Now that the honeymoon’s over I guess I’ll have to go back.
LOL at the sports section thing. The WaTi sports section discusses one thing and one thing only - Redskins football. Well guess what - this Sunday is the last week of the NFL season (aside from the playoffs, which the skins didn’t come close to making), so canceling the sports section now is certainly no coincidence.
Colorado’s minimum wage going down 3 cents in 2010, first drop in the nation since 1938.
DENVER (AP) — Colorado’s minimum wage will drop slightly in the new year — the first decrease in any state’s minimum wage since the federal minimum was adopted in 1938.
Colorado’s wage is falling 3 cents an hour, from $7.28 to the federal level of $7.25. That’s because Colorado is one of 10 states that tie the state minimum wage to inflation. The goal is to protect low-wage workers from having unchanged paychecks as the cost of living goes up.
But Colorado’s provision also allows wage declines, and the state’s consumer price index fell 0.6 percent last year, so the minimum wage is going down.
The lower consumer price index, attributed to lower fuel prices, would have forced the wage down 4 cents an hour, But no state can go below the federal minimum of $7.25.
Thirteen other states and the District of Columbia will keep a minimum wage higher than the federal minimum, according to the U.S. Labor Department. Alaska will join them Friday when its minimum wage rises 50 cents to $7.75.
Colorado’s drop is small — but those among the estimated 48,000 residents earning the minimum shook their heads at the possibility of pay cut.
I want to wish everyone a happy and safe New Year’s and I hope you find happiness, joy and affordable housing in 2010. To Housing Wizard and Ate-Up - I thought a lot about you over the last week and I hope the holidays were survivable and you know your friends here at the HBB are here for you if you need us. And I am sure others are going through rough times too and I hope things get better for you too.
2009 sucked in a lot of ways and I hope for all of us 2010 is a better year. But for me five stories give me hope and/or happiness. There are still miracles and inspirational people out there. The best news of 2009 (IMHO):
1.) Jaycee comes home.
http://www.youtube.com/watch?v=UhahVfiviJc&feature=related
2.) Sully lands the plane.
http://www.youtube.com/watch?v=imDFSnklB0k
3.) Tyke on the track.
http://www.youtube.com/watch?v=qC2eF0L-QAA
4.) Tyke under the pole.
http://www.youtube.com/watch?v=sb7I9jnQVAo
5.) Susan sings.
http://www.youtube.com/watch?v=9lp0IWv8QZY
San Diego RE Bear,
Cheers! (Hwy lifts his cup of red red fine…) Here’s lookin’ at ya kid!
San Diego Real Estate Bear . I just noticed your good wishes for Ate-up and myself and I thank you . I’m doing OK in spite of spending Christmas and New Years alone . Maybe next year I will get back in the grove
again regarding the Holidays . Sometimes just being peaceful and alone is what you need for a while . I’m a changed person and I’m pondering
what to do with that .
Happy New Year San Diego Real Estate Bear and to everyone else on this blog …..Cheers !
Obama warns against NWA 253 backlash, intolerance
Scott Ott ~ Examiner Columnist ~ December 29, 2009
In the wake of the attempted Christmas Day bombing of Northwest Airlines flight 253, President Obama, in a news conference from the Pacific White House in Hawaii, on Monday cautioned Americans to avoid “lashing out against folks in puffy underpants.”
Umar Farouk Abdulmutallab, 23, the son of a wealthy Nigerian banker, faces charges of attempting to destroy an airliner by detonating a high explosive sewn into what the FBI described as “boxers or briefs … but clearly not adult incontinence undergarments.”
“Our future as a nation depends on how we react to this incident,” the president said. “If we start profiling people based on the mere appearance of their slacks, a lot of incontinent adults as well as infants and toddlers will be swept up in the discriminatory backlash. Civil rights and social justice must take precedence over our parochial concerns about fire, explosions, crashes and the potential of physical harm resulting from such events.”
Standing side by side with the chairman of the Council of Adult Incontinence Relations, Obama noted that some of his own relatives had worn absorbent underwear, and “none of them ever attempted to down a jet.”
“We cannot let this isolated incident spark hate against a people who, by and large, want nothing more than to be left alone,” the president said. “The greatest threat we face is a failure of tolerance. We will not allow a few bad apples change who we are as Americans.”
Meanwhile, Homeland Security Secretary Janet Napolitano announced new security measures for airports, including a requirement that passengers “dispense with belts, allowing their trousers to sag in a manner that would reveal any potential undergarment threat.”
“Sagging is still quite fashionable among America’s youth,” Incapatano said, “and so we believe that these new measures will not cause significant inconvenience to the traveling public. Every airline passenger will submit to this security protocol to prevent it from being discriminatory against any minority group.”
“We cannot let this isolated incident spark hate against a people who, by and large, want nothing more than to be left alone,”
Wow - I can’t believe he said that. Just shows how clueless he really is, both in terms of his understanding of the problem, and his public relations capabilities.
Yeah - that’s it. They just want to be left alone. All that “blowing up airplanes” stuff is just to get some time away from other people; some alone time with those 70 virgins.
Might BHO’s approval rating actually go below Bush’s before terms’ end? At this rate I’d say there’s a very good chance.
(Nevermind this post - right after making it I realized it was a parody article)
OK - nevermind my post (which hasn’t shown up yet). I didn’t realize this is a parody piece.
wmbz - did you?
Most likely not, he was to busy looking for Lil’ Opie bashing post #2,789
…That or he was told to step outside the bar if he wants to light up a smoke, now that NC has a ban like CA.
Oops - looks like an 11.999th hour dive for Wall Street to close out the year.
A bad omen for 2010?
Or will the fluff rally continue on (as predicted by the resident troll)?
Tune in next year…
Eddie, I went up to the East Lake area today — just to check (since my wife and I wanted to compare Tampa area to our native upstate while our xmas visit was fresh in our minds) — we went to an advertised foreclosure (admittedly good looking) and were stunned by the number of tired, abandoned houses around it that are not yet on the market. Yes, there is a massive shadow inventory.
Thanks to all that responded to my earlier post with encouragement.
BTW Eddie, there are DOZENS OF SHADOW INVENTORY IN MY ZIP 33470.
I drive this area all of the time and can tell you that I have driven past, peeked in and entered some of these homes.
Some are completely trashed that were once over the top luxury homes. Some are just sitting there unscathed but completely empty.
Get your facts straight please. Also, you are wrong on your rent theory as well.
HAPPY NEW YEAR EVERY ONE and thanks Ben, God bless.
Eddie has no rent theory and no data. All he has to offer here is trollery and mockery.
Beware the black “non-Hawaiian” President…he aims to “destroy” America!
After 2-plus decades, Navy destroyer breaks record:
By DAVID SHARP, Associated Press Writer David Sharp, Thu Dec 31
“…The defense budget signed by President Barack Obama in December includes money for the first of at least three more ships. There’s talk of many more being built.”
“It’s the envy of the world,” said Mahon. “Every surface warship officer in every navy in the world would love to command an Arleigh Burke.”
“Loren Thompson, a defense analyst at the Lexington Institute, gives credit to the Navy for scaling back the costly Zumwalts and focusing on the tried-and-true Burkes.”
“The DDG-51 Arleigh Burke, he said, is now in a rare class of military systems that’s so durable and versatile that it continues for generations, like the C-130 Hercules cargo transport, an airplane that first went into production in 1957.”
Happy New Year!!!!! (hah, we woke up the neighborhood, banging on pots & pans…)
Ya didn’t bang loud enough, as two of my sons and I passed the witching hour asleep on the couch
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Bring on the taxes
Capital gains change in R.I.
Capital Gains: Rhode Island’s new rules regarding capital gains are now the law of the land. So if you sell an asset at a profit — also known as a capital gain — favorable tax treatment no longer applies.
Rhode Island will tax your profit the same as it taxes wages, bank-account interest or other so-called ordinary income, said Mark Higgins, dean of the University of Rhode Island’s College of Business Administration.
As a result, taxpayers will pay Rhode Island tax on that profit at “whatever their marginal tax rate is,” which can be anywhere from 3.75 percent to 9.9 percent, Higgins said. (The old capital gains tax rates ran as low 1.67 percent for higher-income taxpayers, 0.83 percent for lower-income taxpayers.)
Steven A. Cobb, chief revenue agent for the Rhode Island Division of Taxation’s office audit and discovery section, put it this way: As of now, “Capital gains rates no longer apply.”
The change took effect on Friday.
The change is far-reaching: It affects all sorts of assets you hold for investment purposes, such as stock, mutual fund shares, or land.
Welcome to California. As far as I know we’ve never had a capital gains rate - it’s all ordinary income.